[Homestead] Francd finally meets E.U. bidget limit
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
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France to Meet EU Budget Deficit Limit
*By Emmanuel Georges-Picot* Associated Press Writer
Published: Sep 22, 2004
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
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
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