French government to unleash budget cuts to protect AAA rating
Published 24/08/2011 | 11:48
The French government is set to unveil measures to achieve billions in savings as it struggles to achieve targets.
Prime Minister Francois Fillon is expected to announce a mix of cuts and tax hikes to save as much as €14bn over two years.
French President Nicolas Sarkozy signed off on the programme after claims that ratings agencies were about to strip France of its AAA credit standing
France's public deficit targets are based on a forecast of 2pc growth this year.
But many analysts say that the goal is now too optimistic.
France aims to cut its public deficit to 5.7pc this year, 4.6pc next year and reach the EU's limit of 3pc in 2013.
Officials have refused to confirm in advance any of the measures to be taken as negotiations are due to continue down to the wire.
However, the Government is widely expected to impose a tax on the super rich, although the specifics were unclear.
The Government is also expected to aim at eliminating or reducing many tax breaks, and increase taxes on big companies.
France's debt level of around 85pcis way above the EU's recommended maximum level of 60pc.