France

Hollande admits France will not reach 3.0 per cent deficit target in 2013

Reuters/Philippe Wojazer

President François Hollande for the first time admitted that France will not reach the three per cent target for its deficit this year. Hollande was on a meet-the-people visit to the Burgundy city of Dijon, which is being interpreted as an effort to revive his flagging popularity.

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France will not reach European Union-imposed limit for its deficit of three per cent of GDP in 2013, predicting that it will probably be 3.7 per cent, Hollande said.

Dossier: Eurozone in crisis

As unemployment rises and growth rates fail to reach targets, the government is struggling to live up to its commitment to the EU and has announced more cuts next year.

That means more austerity and may mean more cuts in social benefits, especially pensions.

“We have to make courageous choices and I will make them, especially when it comes to our pension scheme,” Hollande said. “Today we can see that the provisional deficit for retirement could reach 20 billion euros by the end of 2020.

"How can we accept this? It would mean calling into question the solidarity we have created across generational lines and the future of our compatriots. So everybody needs to live up to their respective responsibilities.”

Hollande spent 48 hours in Dijon, a lengthy visit designed to emphasise the difference with the hectic pace of his predecessor, Nicolas Sarkozy.

Despite widespread support for the military intervention in Mali, Hollande’s standing in opinion polls continues to fall, with the latest on 7 March showing him at 33 per cent.

The Dijon visit was seen as an attempt to revive contact with ordinary French people and calm the nerves of local politicians worried about the effects of budgetary rigour on the areas they represent.

“A few dissatisfied customers shouted but, apart from that, Dijon with François Hollande was a real moment of joy,” said Dijon mayor and Senator François Rebsamen.

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