‘High risk’ France to miss deficit target: Auditors

Paris / AFP

There is a great risk that France misses its 2017 deficit target because of increased spending since the start of the year, the Court of Auditors warned on Wednesday.
Francois Hollande’s government has repeatedly promised that it will bring the public sector deficit to 2.7% of gross domestic product (GDP) next year, below the three percent limit required by eurozone deficit rules.
But extra spending over recent months makes this unlikely, said the Court, which oversees public spending.
“The objective of a deficit reduction to 2.7 percent carries a high risk of not being met, on the basis of decisions that are now known,” the Court said in a report on the state’s finances.
Reforms presented in the government’s stability programme in April were not be sufficient to bring public finances back on track, it said. Instead, higher spending on the military, jobs, young people, tax cuts for regions and, mostly, a bigger civil servants payroll will all push up spending, it said.
The EU has warned that France will not be allowed to exceed the three percent deficit target again. France “has been granted a delay of two years twice. This will not be extended again,” EU Economic Affairs Commissioner Pierre Moscovici said in January. The Court of Auditors said there was a good chance that France would at least manage to keep its promise of a 3.3% deficit for this year.