France has no grand plan to cut only the huge national debt, which has contributed to concerns about the financial stability of Europe.
Gradually, however, the government of President Nicolas Sarkozy has shown that it is squeezing billions of euros of expenditure. While neighbors like Germany, Britain and Spain have publicly announced sweeping programs for tens of thousands of dollars in cuts, Sarkozy and other French leaders have announced plans to save one by one, often in private meetings and always avoiding the word “austerity.”
This is because many here that the word an epithet, and the governments of left and right have preferred to spend their way out of crisis. Sarkozy is breaking with that tradition, but it seems too afraid of public protest – or the resistance within his own party – to say.
Greece, where the crisis began debt Europe, has announced austerity measures worth euro30 billion ($ 37,600,000,000) through 2012 – including utilities and pension pay cuts and higher taxes. Since then the major economies have joined, like Germany, with a plan to save euro80 million in 2014 and Britain has announced plans to save 50 million pounds a year.
Prime Minister Francois Fillon told lawmakers in a closed meeting of legislators from his conservative UMP party that the State will cut spending euro45 million over the next three years. The statement was later reported to the French media.
The cuts that Sarkozy has championed most loudly are those who point to their own ministers, who have come under scrutiny for recent wasteful habits, including billing the government euro12, 000 cigars and euro116, 000 to rent a private jet . Last week, Sarkozy ordered the ax “unreasonable or excessive costs,” end the use of state money to hunt on the grounds of a castle, every year, reducing the number of official vehicles, saying ministers to travel train instead of plane when possible, and not have so many people along when they leave.
These savings occur only nominal, however.
The budget will have a bigger boost from cuts in tax cuts for corporations and the rich. These were initially estimated to produce savings this year of EURO 5 million, a figure the budget minister, Francois Baroin raised to Euro10 million on Wednesday.
Between 150 measures announced in private at a cabinet meeting is cutting 100,000 jobs in the state sector between 2011 and 2013 by not replacing half of workers retire, expects to save Euro3 billion. This is in addition to cuts that Sarkozy is looking at regional and local budgets.
The economist Jean-Herve Lorenzi said on Saturday that France has a vision “outdated” to explain the economic decisions to the public.
“We are convinced that in France, and is a weakness, a truth which announced progressively easier to swallow than the truth, he said clearly,” he said.
Conservative French lawmaker Jean-Francois Cope said it was time for saving and fiscal austerity “is not a curse word.”
“I think the French are asking us to make responsible decisions,” he said.
Sarkozy’s government also intends to increase retirement age from 60 to 62 in an amendment to a pension system anymore. The plan has been in the works for years, but around 800,000 people took to the streets for 10 days to protest against it – that illustrate Sarkozy the French worry about pushing too hard to tighten the belt. Public protests have reduced the pension reform, and governments in the past. The unions walked out of negotiations with the government last week proposed a freeze on public sector salaries.
France’s total budget this year provided euro384 million in expenses, but revenues only euro268 million, a deficit of 8 percent. Sarkozy has pledged to make the 3 percent in 2013 to adhere to the rules of the Union, without explicitly explaining how to do it.
Meanwhile, the country’s debt is huge and growing: He got euro46.5 million in the first quarter to stand at euro1.5 billion euros, or 80.3 percent of gross domestic product, according to figures released on Wednesday.
Many of the cuts should go to the French National Assembly later this year as part of the budget of 2011. Economists question whether it will be enough to calm markets worried, or meet Sarkozy’s own objectives to reduce the deficit.
Perhaps because of these concerns, Sarkozy has taken a different course on austerity abroad.
He joined other European leaders in the discussion to the adjustment budget at the summits of world leaders in Canada a week ago. President Barack Obama has favored stimulus with austerity, and some fear that the cuts will stifle Europe’s recovery from recession. The leaders pledged to reduce public deficits in the rich countries by half by 2013, with scope for achieving the objective.
Martine Aubry, who leads the Socialist opposition and hopes to challenge Sarkozy for the presidency in two years, called the cuts in public sector spending “inept and brutal” and said it would increase insecurity and school failure. Still, even added: “Of course, we must save. We have a deficit and debt are catastrophic.”