PARIS (MNI) – France’s central government intends to slash its
deficit by some E60 billion next year to less than E92 billion in order
to reduce the overall public deficit from 7.8% of GDP to 6.0%, according
to French press reports published Friday.
Last week Budget Minister Francois Baroin said the 2011 government
shortfall would be less that E100 billion. The definitive target, to be
determined this weekend for presentation in Cabinet next Wednesday, will
be between E91 billion and E92 billion, the dailies Le Figaro and Les
Echos said.
The spectacular drop is due in large part to one-off borrowing this
year to finance longer-term investment and research, which boosted the
initial deficit target of E117.4 billion by E35 billion to over E151
billion.
Additional savings next year will come from cutbacks in operational
outlays, while revenues will be boosted by higher income tax returns and
a E10 billion reduction in tax write-offs.
“We aim to come as close as possible to E90 billion” for the 2011
deficit, said an official cited by Les Echos.
The deficit target was also set in order to cap new government
borrowing next year, explained a ministry source cited by Le Figaro: E92
billion “is the upper limit to allow France to borrow less on the
markets in 2011 than in 2010.”
This year’s public deficit could come in slightly below 7.8% of
GDP, a ministry source confided to Le Figaro.
–Paris newsroom +331 4271 5540; Email: stephen@marketnews.com
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