France 2012 Budget Expected To Cut Deficit 14.6% To E81.7 Bln

Author: Market News International | Category: News

PARIS (MNI) – France’s 2012 budget bill, to be unveiled by the
government today, is expected to cut the public deficit by 14.6% next
year to E81.7 billion from this year’s projected E95.7 billion
shortfall, according to French newspaper reports.

According to government and parliamentary sources, France’s public
debt ratio will be 87% of GDP next year, up from an expected 85.4% this
year. The increase is attributed to accumulated social security
deficits.

Debt servicing costs are expected to be about E48.8 billion, thus
holding below the symbolically important E50 billion threshold,
according to the reports.

The daily Le Figaro reported that payroll taxes deducted from
employees’ paychecks to cover a wide range of social services, including
health care, will rise to 44% of GDP next year from an expected 42.9%
this year. Payroll deductions for the health care system alone are
expected to rise by E20 billion, from E435.6 billion in 2011 to E455.2
billion next year, the paper reported.

The government is expected later today to unveil the budget bill
for 2012. It contains a number of recently decided new tax increases and
spending cuts — including the elimination or reduction of tax
incentives — to the tune of E12 billion.

The French Treasury, AFT, is also expected today to publish its
borrowing program for 2012.

–Paris bureau, +331-42-71-55-40; bwolfson@marketnews.com

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