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France eyes better times with new budget

Wednesday, September 30, 2015 - 01:31

France unveils a budget for next year that promises a modest improvement in its finances and offers households tax cuts ahead of presidential elections in 2017. But as Tim Graham reports, there are still concerns about the weakness of the economy.

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Europe's second biggest economy unveils its blueprint for the year ahead. France foreshadowing a modest improvement in its finances, and even a series of household tax cuts, as part of its latest budget. The French Finance Minister, Michel Sapin, says the growth target is within reach. (SOUNDBITE) (English) FRENCH FINANCE MINISTER, MICHEL SAPIN, SAYING: "The cautious step we took for 2015 once again prevailed for the 2016 budget, with a 1.5 percent growth forecast for next year which corresponds to the consensus by economists." Under the budget plan, France's public deficit would next year fall back to 2008 levels. That will likely mean France has the biggest deficit in the euro zone, because of its refusal to impose tough austerity measures. Despite that, Rabobank's Jane Foley says the overall picture suggests the French economy is turning a corner. (SOUNDBITE) (English) SENIOR FX STRATEGIST, RABOBANK, JANE FOLEY, SAYING: "There is of course more possibilities for reform, but we've got to bear in mind that France does have a presidential election coming up in two years time - and that probably does mean that the ability or the chances of more aggressive structural reform are probably going to be limited." France's public finance watchdog says the 1.5 percent growth target is "achievable". It's also the level economists widely consider necessary to get unemployment falling. Some good news for Francois Hollande, who has set lower unemployment as his top economic objective... and a condition for him running for president again in 2017.

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France eyes better times with new budget

Wednesday, September 30, 2015 - 01:31