Sarkozy holds economy talks at Riviera residence

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French President Nicolas Sarkzoy met Friday with Premier Francois Fillon and key ministers at his Riviera summer residence to tackle the economy and spiralling public deficit.

The talks -- which will include top advisors and Economy Minister Christine Lagarde and Budget Minister Francois Baroin -- centre on stimulating economic growth, the 2011 budget and France's huge deficit.

"The debate on a possible revision of the 2011 growth prediction will of course be on the agenda but there won't necessarily be a decision," a source close to Lagarde told AFP.

The government has predicted growth of 2.5 percent between 2011 and 2013 but the International Monetary Fund has deemed this "too optimistic."

The IMF says France needs to implement additional measures to reduce its public deficit to 3.0 percent of output by 2013, in accordance with its European Union obligations.

Several eurozone countries, including France, have far higher ratios, notably because of the costs of facing the global economic downturn, and are working on often unpopular reforms to reduce structural deficits.

The French economy grew by a faster-than-expected 0.6 percent in the second quarter of 2010, topping the Bank of France's prediction of 0.4 percent.

The ministers will also discuss the possible removal of hundreds of existing tax breaks that could bring an extra 8.5 to 10 billion euros into state coffers.

The cabinet is to meet for the first time after the summer break on August 25, with controversial pension reform plans to go before the lower house of parliament on September 7.

After the meeting, Sarkozy will return to his wife Carla Bruni's nearby family residence at Cap Negre.

© 2010 AFP

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