sábado, 5 de noviembre de 2011

New French Austerity Package Looms

PARIS—French President Nicolas Sarkozy is meeting Saturday with top government ministers to work on another austerity package that could be unveiled as early as Monday, a person familiar with the matter said.

Mr. Sarkozy has already said he would need to pass an additional €6 billion to €8 billion ($8.3 billion to $11 billion) of austerity measures to ensure France meets its deficit reduction targets as growth will be much weaker than the government had budgeted.

With the euro-zone debt crisis continuing to hammer European economies, Mr. Sarkozy late last month cut France's growth forecast to 1% for 2012 from 1.75% that was previously in the budget for next year.

Debt, Doubt and the Euro Zone

See country-by-country events in the crisis.

View Interactive

Key Players in Europe's Debt Crisis

Europe's political and financial leaders are looking for ways to keep Greece's crisis from spiraling into other countries.

View Interactive

More photos and interactive graphics

The person familiar with the matter said the announcements may come Monday at a cabinet meeting. Mr. Sarkozy had pledged to address the issue once the Group of 20 summit was over in Cannes, where the euro-zone debt crisis swamped France's ambitious agenda for global reforms.

A spokeswoman for the French presidency declined to comment on whether the meetings were taking place.

Measures being considered include raising the Value Added Tax on restaurant meals and erasing a public holiday from the calendar, according to French newspaper Le Journal Du Dimanche. The state is also weighing whether to increase the tax on companies with revenue above €150 million to 36% from 33%, according to the newspaper.

The person familiar with the matter said nothing has been decided yet on such measures.

Speaking in the French Alps earlier Saturday, French Prime Minister Francois Fillon said the budget measures would be one of the most rigorous that France has witnessed since 1945

France has pledged to reduce its deficit from 5.7% of GDP this year to 4.5% next year, before reaching the 3% limit prescribed by European Union treaties in 2013.

The heat is on France, the euro zone's second largest economy, to meet those targets after ratings firm Moody's Investors Service warned the stable outlook on France's triple-A sovereign rating was under pressure.

France's budget minister Valérie Pécresse said Friday the austerity measures should focus on spending rather than raising taxes. The previous austerity package at the end of August was almost entirely based on boosting tax revenue.

"We can't go on spending without counting, we can't go on spending beyond the wealth we create," Ms. Pecresse said on French TV.

Write to William Horobin at William.Horobin@dowjones.com and Max Colchester at max.colchester@wsj.com

prime minister francois fillon, french president nicolas sarkozy, austerity measures, president nicolas sarkozy, francois fillon, french president nicolas, budget measures, french presidency, nicolas sarkozy, place measures, french alps, french prime minister, reduction targets, financial leaders, debt crisis, ambitious agenda, restaurant meals, european economies, euro zone, government ministers


No hay comentarios:

Publicar un comentario