France to seek €5bn in extra cuts

French prime minister Jean-Marc Ayrault said today that €5 billion of additional cost cuts were being sought at government ministries next year.

Budget minister Jerome Cahuzac had told reporters yesterday that ministers would be asked to find slightly more than 4 billion euros in additional cuts in 2014.

"We need to find €5 billion in new savings in the state budget for 2014," Mr Ayrault said in a statement.

"These savings will enable us to guarantee the restoring of public finances while also ensuring the financing of measures we have agreed on to bolster competitiveness, combat unemployment and reinforce welfare for the most destitute," he said.

The call for more belt-tightening comes after the Socialist government admitted last month that it will fail to bring the public deficit below a European Union ceiling of 3 per cent of economic output this year as it had hoped.

The cuts will add to an existing plan to slash public spending by €60 billion over president Francois Hollande's five-year term by trimming the state budget, ministerial running costs and other spending.

Economists are concerned that the government has yet to specify where it expects to make the cuts, with ministries already working to tight budgets and resistance expected from lawmakers to any orders to cut local government pay or perks.

Mr Ayrault said there would be no attempt to cut staffing.

Reuters