France cuts public deficit to 3.5%

France last year posted its smallest public deficit since the global financial crisis of 2008, data showed, making this year’s government target “perfectly credible” according to finance minister Michel Sapin.

The INSEE statistics agency said the public deficit, which includes the shortfalls of the central state, local government and welfare system budgets, fell to 3.5 per cent of economic output last year.

That was below the 3.8 per cent that Paris – long criticised in Brussels for failing to meet its budget promises – had targeted in its commitments to European Union institutions and other euro zone countries.

“It means we’re cutting the deficit while supporting growth at the same time,” said Sapin.

But while he said this year’s government deficit target of 3.3 per cent was now “perfectly credible”, he ruled out setting a more ambitious goal, with a presidential election little more than a year away.

President François Hollande, deeply unpopular over tax hikes early in his presidency and his failure to cut unemployment, has promised not to seek re-election unless joblessness falls. – (Reuters)