France defends ‘serious’ budget

The French government defended its 2017 budget on Wednesday, seven months ahead of the presidential election, after a top watchdog said it doubted it could hit its fiscal targets.

French Finance Minister Michel Sapin, Junior Minister for Budget Christian Eckert and Justice Minister Jean-Jaques Urvoas leave the Elysee Palace following the weekly cabinet meeting in Paris, France, March 16 REUTERS/Philippe Wojazer

France, which has repeatedly broken the European Union's fiscal rules, is targeting a deficit of 2.7 percent of GDP for 2017, the lowest in a decade and under the EU's limit of 3.0 percent.

"This budget is serious," Finance Minister Michel Sapin said.

Presenting a package of measures which contains few pre-election giveaways, Sapin blasted the right-wing candidates for the presidency who have promised tax cuts as "irresponsible".

"The candidates for the presidential election, or the (right-wing) primary before that, who promise immediate tax cuts and say the control of public expenditure can be postponed until tomorrow, are irresponsible," Sapin said.

An independent watchdog, the High Council of Public Finances (HCFP) said this week it doubted that France could hit the 2.7 percent deficit target.

"Based on the information we have, (the HCFP) considers as uncertain that the nominal deficit will be brought to less than 3.0 percent of GDP in 2017," it said.

President Francois Hollande said Wednesday the target was "credible and serious", the government's spokesman said.

To the annoyance of its EU partners, France has delayed bringing its deficit back below the 3.0 percent limit on a number of occasions in recent years under both Socialist and centre-right governments.

Hollande says he will decide by the end of the year whether to stand for re-election next year.

He has partly conditioned his bid on bringing down unemployment, but he suffered a blow when figures released this week showed a sharp rise in joblessness in August.

The number of unemployed in mainland France grew by over 50,000, or 1.4 percent, to 3.56 million, according to the labour ministry.

Former president Nicolas Sarkozy and a former prime minister, Alain Juppe, are the favourites for November's two-round primary which will decide the centre-right candidate for the presidency.