JOUY-EN-JOSAS, France (MNI) – French Prime Minister Jean-Marc
Ayrault said Wednesday that the government’s budget for 2013 will
confirm a reduction in the public deficit to 3% of GDP as part of a
multi-year plan to balance public finances by 2017.

“It is necessary to strengthen France’s financial credibility,”
Ayrault told business leaders here. “Without this confidence, the most
ambitious reforms won’t bear fruit.”

Ayrault said he expected that efforts to tighten the budget would
be based half on new tax receipts and half on a reduction in spending.

The prime minister said the Eurozone crisis continued to weigh
heavily on the French economy and that returning to stability in Europe
was a key element in restoring confidence and growth.

“In the short term, we are determined to do everything possible to
keep Greece in the Eurozone,” Ayrault said, calling for a strengthened
stability mechanisms in Europe and, in particular, rapid progress toward
a banking union, with the European Central Bank playing a central role.

The prominent and unprecedented presence of a prime minister at
“summer university” of the employers’ association, Medef, is a symbolic
effort on Ayrault’s part to overcome the inveterate mutual mistrust
between French entrepreneurs and Socialist leaders.

“It is with pleasure that I agreed to participate, because I
believe in the virtues of dialogue between the government and the social
partners and because companies are on the front line in the effort to
restore our economy,” the prime minister said. “The government needs
you, just the way it needs the unions and the workers.”

Nine other ministers will participate in the numerous round tables
planned at the campus of the international business school HEC, in the
suburbs of Paris, to explain the government’s strategy for a return to
economic growth and to solicit the support of business leaders.

Ahead of Ayrault’s opening address, Medef president Laurence
Parisot called on the government to cast aside “mistrust” and
“suspicion” and “encourage” business development.

In an interview in Wednesday’s edition of Le Monde, Parisot warned
that it would be “irresponsible to envisage any increase at all in labor
costs” at a time when firms’ profit margins have sunk to “historic
lows.”

Instead, the government should revisit its strategy for fiscal
consolidation, limiting revenue increases next year to E10 billion and
cutting outlays by double that amount in order to freeze overall public
outlays, she argued.

Once again Parisot urged the Socialists to lighten the burden of
payroll charges by shifting part of the financing of social programs to
value-added taxes and especially to the broader CSG tax on earnings and
investment revenues.

Industry Minister Arnaud Montebourg, who will participate Friday in
a round table on government-business relations, defended in a newspaper
interview published Wednesday his regulatory approach to business,
saying he intended to “put an end” to laisser-faire practices and would
not muzzle his criticism of shareholders’ errors.

“But I very often find myself hailing industry captains, just as I
am wont to tell trade unions to take account of economic constraints so
that, on a basis of shared responsibility, we can find an exit to the
crisis and preserve the future of a company,” Montebourg told the
business daily Les Echos.

–Paris newsroom, +331 4271 5540; paris@mni-news.com

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