France needs to bring deficit in line with EU limits in 2017: central bank governor

Governor of French central bank (BdF) Francois Villeroy de Galhau on Tuesday called on the French government to meet its pledge to bring down the budget deficit below 3 percent of gross domestic product (GDP) in 2017 as its credibility is at stake.

Speaking to the local broadcaster Europe1, Galhau stressed that achieving healthy finances was "an imperative necessity" to the eurozone's second largest economy.

"France is necessary for Europe today. Even Germany needs France, especially after Brexit. But the condition is that they believe us," he said.

"The fact of lowering the deficit below 3 percent in 2017 is a key condition for our credibility and, therefore, our influence in Europe," he added.

According to the BdF governor, the target can be reached only if the governing socialists cut public spending by 12 billion euros (13.4 billion U.S. dollars) next year.

For the whole year of 2016, the French government is targeting a budget deficit of 3.3 percent of the gross domestic product against 3.5 percent in 2015.

It pledged it would lower the figure to 2.8 percent next year, below the EU-mandated threshold after it postponed in 2015 the deadline set by the European Commission, blaming wane economic growth and weak inflation in the eurozone. (1 euro=1.118 U.S. dollar) Endit