France says it might take more budget action

21st June 2010, Comments 0 comments

France might announce extra action to fight overspending in the coming months, a top official said on Monday against a background of unease on financial markets over debt in the eurozone.

At the beginning of June, the centre-right government announced that it intended to find 100 billion euros (124.0 billion dollars) in the next three years, achieving half of this by cutting spending and half with new revenues.

The secretary general at the presidential palace, Claude Gueant, told the Financial Times newspaper that extra action might be announced by the autumn to ensure that the public deficit were reduced to 3.0 percent of gross domestic product by the end of 2013, as promised to European Union authorities, from an expected level of 8.0 percent this year.

The debt crisis in Greece has set in train deep concern about the state of public finances in several EU countries, and has also raised some concerns about the strength of some banks in Europe, partly because they hold much government debt.

France has been largely unscathed so far by market pressures over overspending, but has announced strong action to correct its finances, as have many other European governments.

"There will be other announcements. We have to do more of course -- a lot more," Gueant said. The government was preparing a budget for next year and a three-year spending plan which would "appear serious and determined."

© 2010 AFP

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