MNI: France Budget - Deficit Seen Falling as Economy Expands

--FinMin Le Maire Pledges Steady Fall in Public Spending During Macron 5-Yr Term

By Jack Duffy

     PARIS (MNI) - The French government unveiled its 2018 budget on Wednesday,

with officials pledging to wipe out the country's deficit in five years while

cutting spending and reducing France's big debt pile.

     Finance Minister Bruno Le Maire told journalists that with vigorous

economic growth on the horizon for the next few years the time to tackle

France's chronic financial problems was now. 

     "Each time in the past when we have had clear skies we delayed necessary

reforms," Le Maire said. "It is time to change the logic and change the mind

set." 

     The budget sees the French economy growing by 1.7% this year and next,

roughly in line with what official forecasters like the International Monetary

Fund and the OECD expect.

     Le Maire said that France's budget deficit, which has been above the 3.0%

Maastricht Treaty limit since 2007, will fall to 2.9% of GDP this year and

continue on a downward trajectory until it reaches 0.2% by the end of President

Macron's term in 2022.  

     "A France which does not respect its budget commitments is a France whose

political word has lost all credibility," Le Maire said. "To restore our

credibility in Europe it is necessary to respect our European commitments." 

     France and Spain are currently the only eurozone countries still in the

EU's excessive deficit procedure. The UK, not a member of the eurozone and also

heading for the EU exit door, also remains in the EDP

     The budget projects that French government public spending will fall from

56.4% of GDP this year to 53.9% in 2018 and to 50.9% in 2022. 

     Public debt, which has threatened in recent years to cross the 100%/GDP

threshold, is projected to decline from a peak of 97.1% of GDP in 2019 to 91.4%

by 2022. 

--MNI Paris Bureau; tel: +33 1-42-71-55-41; email: jack.duffy@marketnews.com

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