Record budget deficit announced
Cost of hospital stays to rise and car scrap scheme to be reduced as state seeks to tackle €140 billion black hole
JOB cuts in the civil service, increasing the cost of hospital stays and reducing the amount of cash back vehicle owners receive for a car-scrapping scheme are among the measures to reduce France’s record level of debt.
The state will have had a record budget deficit of €140 billion in 2009, 8.2% of GDP - a level that has never been seen before.
The government had been aiming for a figure of about 7% of GDP, but this will be exceeded, Prime Minister François Fillon (pictured) admitted over the weekend.
This means that half the state’s funding will have been though loans this year as general budget expenses are €280 billion.
Among the reasons being given for the poor state of the nation’s finances are reduced income from a drop in business tax and extra expenses linked to swine flu.
Fillon has said he hopes to get things under better control next year and see a deficit down to €115 billion. His plans include further civil servant job cuts, increasing the cost to patients of hospital stays and reducing the reimbursements on certain medicines.
The prime à la casse (bonus for scrapping old cars and buying less polluting ones) is also to be reduced, from €1,000 to €700 on January 1 and then to €500 on July 1.
Other nations are also battling with their public deficits, with Germany’s expected to go over 4% of GDP next year and Britain’s over 12%. The EU ceiling is supposed to be 3%.
Photo: Benjamin Lemaire_Creative Commons
