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French auditor says cuts needed to meet deficit goals
July 2, 2012 / 8:36 AM / 5 years ago

French auditor says cuts needed to meet deficit goals

PARIS, July 2 (Reuters) - Flagging economic growth means France’s Socialist government will have to find 6-10 billion euros ($7.6-12.6 billion) in budget savings this year and 33 billion in 2013 to fulfill its deficit targets, the state auditor warned on Monday.

The Cour des Comptes - a quasi-judicial body responsible for overseeing public accounts - said in an indepth review of public finances that a state revenue shortfall was threatening deficit goals that were based on over-optimistic growth forecasts.

It said growth this year would be around 0.4 percent, below the 0.7 percent in the budget plan passed by the previous government. For 2013, it assumed anaemic growth of 1 percent, well shy of an official 1.75 percent forecast.

The auditor said it had not uncovered any skeletons left by the prior conservative government but pointed to up to 2 billion euros of likely overspending this year in areas like defence, agriculture and housing.

It said 2013 would be the crunch year for public finances and suggested that budgetary adjustments should be aimed mainly at spending. Job cuts would be indispensable to curb mounting payroll costs, it said.

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