CORRECTED: French 2011 debt outlook raised to 85.4% of output

21st June 2011, Comments 0 comments

The French public debt is set to be 85.4 percent of output this year from 84.6 percent expected previously, a budget ministry document received by AFP showed on Tuesday.

The public debt would then peak at 86.9 percent in 2012, the document estimated.

The government had estimated previously that the debt would amount to 84.6 percent of gross domestic product this year and 86.0 percent next year.

But the national statistics institute INSEE recalculated in May the debt for last year at 82.3 percent of output instead of 81.7 percent announced previously.

EU and eurozone rules say that the debt -- the accumulation of annual budget deficits -- should not exceed 60 percent of output, but many members are far above this limit.

France has struggled for several years to contain its annual public deficit within the 3.0-percent limit under EU and eurozone rules, and since the financial crisis exploded its deficit and also its debt have risen sharply.

The government has made control of public finances a matter of urgency against a background of debt crises in Greece, Ireland and Portugal, although Frrance has played a leading role in organising rescue finance for those countries.

The Organisation for Economic Cooperation and Developnent and the International Monetary Fund have warned that many leading countries should work hard and fast to reduce deficits and debt.

The French budget for 2012 -- an election year -- is due to be presented next week.

On Tuesday, French Budget Minister Francois Baroin was beginning outlining the general direction of next year's budget to parliament, but the Les Echos newspaper reported that he would propose only a few spending cuts.

© 2011 AFP

0 Comments To This Article