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French audit office says 2015 deficit target "uncertain"

Xinhua, February 11, 2015 Adjust font size:

French audit office, la Cour des Comptes, on Wednesday called the French government's budget deficit target of 4.1 percent this year "uncertain," recommending additional measures to reign in public spending.

In its new annual report on the economic situation and outlook of public finances, the national accounting office cast doubts on the Socialist Party's financial roadmap in which they pledged to trim the budget gap by 3 percentage points and accelerate growth to 1 percent against 0.4 percent expected for 2014.

"Reducing budget deficit in 2015 is based on an optimistic estimate of growth and revenue and on spending targets hard to achieve," the national accounting office said.

"Even if the 2014 results are better than the 4.4 percent forecast, France's ability to meet its commitments remains uncertain for 2015," the court of audit director Didier Migaud said.

In order to meet targets, the government has to energize efforts to have a more scrupulous management of public finances to ensure partners and financial markets, he added.

"The confidence that our country enjoys in political, economic and financial circles at a European and international level is not infinite," Miguad noted.

Under pressure to put the finances of the eurozone's second largest economy in order, the government said it would save 21 billion euros (23.73 billion U.S. dollars) this year to help reduce the budget gap which stood at 85.6 billion euros in 2014.

However, the audit office saw risks in achieving this pledge, arguing a feeble inflation could have an impact on the expected savings related to frozen wages and social services.

Last week, the European Commission urged Paris to take additional measures to deliver its promises.

France postponed by an extra two years their target to reach the 3 percent goal, the rate mandated by the EU to reach healthy finances, with plans to maintain its deficit at 2.8 percent of the gross domestic product by 2017. (1 euro = 1.13 U.S. dollar) Endite