Sarkozy promises public spending cuts

18th May 2004, Comments 0 comments

PARIS, May 17 (AFP) - French Finance Minister Nicolas Sarkozy promised Monday to rein in public spending, with an undertaking that the benefits of a return to economic growth will be used to pay off the country's burgeoning public deficit.

PARIS, May 17 (AFP) - French Finance Minister Nicolas Sarkozy promised Monday to rein in public spending, with an undertaking that the benefits of a return to economic growth will be used to pay off the country's burgeoning public deficit.

With official figures predicting a higher-than-expected 1.9 percent growth rate this year, Sarkozy is drawing up spending guidelines for 2005 - and he told Le Figaro newspaper that his priority was "restoring order to our public finances."

"The systematic increase in spending is not the solution to France's problems ... For 23 years successive governments have presented a budget in deficit. It cannot go on!" he said in the interview.

Recalling that France has undertaken to the European Union to bring annual overspending down to within three percent of gross domestic product (GDP) by 2005, he went on: "So I want to be clear. The extra revenue from growth will be directed as a priority towards reducing the deficit."

France breached the EU Stability and Growth Pact's deficit ceiling in both 2002 and 2003, and is expected to post a deficit of 3.6 percent this year.

Sarkozy did not deny that he will ask for savings at the defence ministry - a report that has already provoked expressions of concern from Defence Minister Michele Alliot-Marie who says they would be incompatible with military commitments made by President Jacques Chirac.

"We have to make choices. Not everything can be a priority. If we want to take on new expenses, especially in favour of social cohesion, then we need to finance them with savings," he said.

The popular finance minister, who ranks as number two in the government after Prime Minister Jean-Pierre Raffarin, also promised action to undo the 35-hour working week - the key piece of social legislation introduced by the last Socialist government.

Describing it as a "policy against jobs" and a "financial disaster," Sarkozy said the cost to the state as a result of exemptions to companies' social security charges was currently EUR 11 billion (USD 13.25 billion), and would soon rise to EUR 16 billion.

In order to escape from the system, which he conceded was now part of many people's working lives, he said the watchword had to be "flexibility."

"What is the point of obliging everyone to work at the same rhythm. Two systems could exist side-by-side in companies: one for the worker who wants to keep the 35 hours, and another for the one who wants to work more. People could even change systems from one year to the next," Sarkozy said.

Sarkozy downplayed speculation about his relationship with Chirac, with whom he has had a number of well-publicised disagreements - seen by many as part of the ambitious finance minister's long-term strategy to replace the president as leader of the centre-right.

"There is a big difference between the reality of my relations with the head of state and the way they appear in the media. I do not say our discussions are always easy. I do not say we agree on everything. But we see each other a lot, and I do not think he finds my attitude totally strange," he said.

However he reserved the right to speak his mind, even if his views were at odds with the president's. The latest example was last week when Sarkozy urged a referendum on the European constitution, while Chirac kept open the option of a parliamentary vote.

"French political life suffers from an absence of free-speaking and a real sincerity deficit ... I have my convictions and I do not intend to abandon them," Sarkozy said.


© AFP

Subject: French news

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