French welfare budget still bloated

28th September 2005, Comments 0 comments

PARIS, Sept 28 (AFP) - French welfare budgets are running record deficits despite reforms to balance them by 2007 and bring France into line with eurozone spending rules, according to data obtained by AFP on Wednesday.

PARIS, Sept 28 (AFP) - French welfare budgets are running record deficits despite reforms to balance them by 2007 and bring France into line with eurozone spending rules, according to data obtained by AFP on Wednesday.

The data signalled that the welfare budget, which in France is far bigger than the central government budget, would show a deficit this year of EUR 11.9bn, about in line with the record high deficit in 2004.

The information became available before a cabinet meeting on Wednesday to approve the central government budget for 2006.

This is to be followed by a cabinet meeting on October 12 to approve the welfare budgets.

However, the welfare figures were to be presented on Wednesday to the social security accounts commission.

The biggest deficit in the accounts concerns the health budget which is expected to end 2005 with a deficit of EUR 8.3bn.

In 2004 the government introduced significant and highly controversial reforms with the intention of cutting sharply into the overspending this year.

The centre-right president Jacques Chirac had hoped that reforms of the health budget would bring the account into balance in 2007, an election year, but this now seems optimistic.

On September 19, finance minister Thierry Breton insisted that in 2006 the French public deficit, covering welfare, central government and local authority budgets, would be within the European Union and eurozone ceiling of 3.0 percent of output.

He had previously targeted 2.7 percent.

The European commissioner for economic and monetary affairs, Joaquim Almunia, had warned on September 8 that France could struggle to keep its deficit below the ceiling of 3.0 percent of output required by EU rules.

Breton said that for this year the government was aiming for a public deficit of 3.0 percent of gross domestic product, but said that "the objective for next year is to be within this margin and not above".

A deficit of 3.0 percent this year would be the first budget outcome to respect EU rules since 2001.

Copyright AFP

Subject: French news

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