[Homestead] Francd finally meets E.U. bidget limit

Tvoivozhd tvoivozd at infionline.net
Wed Sep 22 13:43:23 EDT 2004


After years of fighting like a tiger to avoid rules that apply to every 
other E.U. member, and of course to France  as well---the old 
DeGaulle/Chirac sickness.



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France to Meet EU Budget Deficit Limit

*By Emmanuel Georges-Picot* Associated Press Writer
Published: Sep 22, 2004

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PARIS (AP) - France will meet its European budget commitments in 2005, 
bringing its deficit under the 3 percent of the EU limit for the first 
time in four years, President Jacques Chirac said Wednesday.

Set at 44.9 billion euros ($55.4 billion), the budget deficit is 
expected to weigh in at 2.9 percent of gross domestic product, according 
to the 2005 draft budget unveiled by Finance Minister Nicolas Sarkozy at 
a Cabinet meeting.

The budget targeted economic growth of 2.5 percent next year in the euro 
zone's second largest economy.

EU finance ministers voted last year not to impose fines on Paris and 
Berlin for running excessive deficits for a third straight year. The 
French deficit was 4.1 percent of GDP in 2003 and was forecast at 3.9 
percent this year.

The latest budget reflects a hold-down on public spending, as well as a 
payment of nearly 7 billion euros ($8.6 billion) from state-run 
electricity company EDF, in exchange for the government taking on its 
pension liabilities.

The proposal, which needs parliamentary approval, also calls for zero 
growth in state spending for the third straight year and budget cutbacks 
in six ministries, starting with the prime minister's office, which is 
to see a nearly 26 percent spending reduction.

Other savings are to come in the civil service with 7,188 jobs 
eliminated, mainly by not replacing retirees. Some 4,800 of those jobs 
are related to education.

The budget contains a raft of new measures that the government says will 
stimulate job creation next year. The 2 billion euro ($2.5 billion) 
package includes the gradual phasing out of a 3 percent corporate tax 
surcharge first introduced in the late 1990s and the extension of tax 
relief from local authorities on new investments.

The finance bill also promises a tax credit for corporations that 
restore jobs to France that have been moved to countries outside the 
European Union. The jobs must be returned within the next two years to 
benefit.

 




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