France to miss 2014 deficit target

Efforts of the French government to lower budget gap doomed to fail in 2014 unless it deliver on its pledge to quicken growth by 1 percent, French audit office la Cour des Comptes said Tuesday.
In its new report on the situation and outlook of public finances, the national accounting office estimated the budget gap of the eurozone's second largest economy, at 4 percent of the gross domestic product (GDP) this year, above the Socialists' target of 3.8 percent.
"The government deficit could be close to 4.0 percent of GDP in 2014, even slightly higher even if the forecast growth of the government is not realized," according to the audit office.
Looking to 2015-2017 stability program, la Cour des Comptes noted "uncertainties over the achievement of anticipated savings, coupled with risks to reach revenue estimates make very fragile 2015-2017 fiscal path, particularly for (the next) year."
With their fresh financial roadmap, the ruling Socialists target to cut budget deficit from 4.3 percent of the national output in 2013, to 3 percent of the GDP in 2015, the rate mandated by the European Union to reach healthy finances.
With the aim, they proposed a 50-billion-euro (about 68-billion-U.S. dollars) package of savings by freezing pensions and welfare benefits for a year and keeps most civil service pay frozen until 2017.
However, the audit office considered ambitious the government's saving target, adding that 30 billion euros of the expected cut in expenditure were "still poorly documented or some (savings) are uncertain because they must be achieved by civil services which the government did not control their spending."
"The assumption of full and immediate impact of state's effort to reduce local public expenditure is very fragile, especially as no action was taken to reduce local authorities' adjustment margins including tax and debt," it added. (1 euro = 1.36 U.S. dollars)