France’s FinMin: No Change To Deficit Targets, Growth Outlook

Author: Market News International | Category: News

PARIS (MNI) – In the face of stagnating domestic activity, French
Finance Minister Francois Baroin reassured investors again Friday that
deficit targets would be respected, whatever happens to the economy.

“We will take the necessary measures to meet our unalterable
targets for deficit reduction,” Baroin said in a radio interview.
“Investors should have no doubt at all about the government’s
determination to reduce our deficits and debt.”

While economic growth had been expected to slow in 2Q in the wake
of the Japanese disasters and the rise in commodity prices amid the
ongoing sovereign debt crisis, the unchanged GDP reading was “a bit
disappointing,” the minister conceded.

Nevertheless, the standing forecasts for full-year GDP growth of 2%
and a pick-up to 2.25% next year have not been modified, he indicated.

Despite the mounting pressures on French public debt yields, Baroin
said he was not stressed “for a second”, because the fundamentals of the
economy are solid and the banking sector is resilient.

No drastic fiscal tightening is in the cards that would jeopardize
“this convalescent growth” or demand “painful” sacrifices from the
weakest members of society, he assured.

Noting that French public spending is the highest in the Eurozone,
he said, “we have the means to continue to reduce spending without
profound changes in the French social model.”

Baroin also attempted to reassure investors concerned about the
debt crisis, promising “strong proposals from the Franco-German couple
to modernize the governance of the Eurozone” after the meeting of French
President Nicolas Sarkozy and German Chancellor Angel Merkel next
Tuesday.

–Paris newsroom +331 4271 5540; Email: stephen@marketnews.com.

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