The French government has revealed that it will almost certainly not be able to meet its objective of trimming the public spending deficit to 3% of GDP by 2013. But where did this slavishly-followed rule – now enshrined in European treaties - come from in the first place? And does it have any economic validity today? Lénaïg Bredoux explores how and why this crucial figure was first created and discovers it dates back more than 30 years...
The French president had argued against major spending cuts in the EU budget, but accepted deal that sees its first-ever reduction for 2014-20.
Reports say France could get an extra year cut its public deficits below the target limit of 3 percent of GDP, while Spain could get longer.
The French economy contracted towards the end of 2012 and will barely grow in the first half of next year says national statistics agency Insee.
Economy needs to start growing again and quickly for France to meet its budget deficit targets, after latest forecasts from statistics agency Insee.
Protesters marched in rally organisers say was aimed at fighting EU-imposed austerity, not criticising the government of President Francois Hollande.
More of French PM's interview with Mediapart: the TSCG, making EU more democratic, cabinet splits and Muslim anger
In this second and final part of his exclusive interview with Mediapart, French Prime Minister Jean-Marc Ayrault answers the suggestion that he is railroading the democratic process with the adoption of the European Treaty on Stability, Cooperation and Governance (TSCG), sets out his position on the widespread use of tax havens by big banks and corporations, and for greater representation of national parliaments in EU decision-making. He also answers questions on recent domestic issues, including his government's decision to ban demonstrations in protest at the publication by a French magazine of cartoon caricatures of Prophet Mohammed, and the calling to book of his interior minister over his out-of-step comments on racial profiling and the right to vote of of non-EU nationals.
Ahead of a vote in parliament next month, the French cabinet on Wednesday approved adoption of the European fiscal treaty, the TSCG, which will require governments to limit their public deficits to 0.5 percent of gross domestic product. To prepare to meet the target, French President François Hollande has pledged to reduce the country’s huge public deficit to 3% of gross domestic product (GDP) in 2013, with a raft of spending cuts and tax increases contained in a new public finances law to be presented before parliament on September 28th. It represents the most severe austerity programme to be introduced in France for 50 years. But a number of leading French economists, including several who publicly supported Hollande’s election campaign, now warn of the potentially catastrophic effects of the tough austerity programme. They argue that the policies will further starve economic growth and thereby simply worsen public finances, leading to a never-ending spiral of recession and austerity. Lénaïg Bredoux reports.
France may abandon plans for a major extension of its high-speed train network as the new left-wing government strives to shrink its huge debt.
New president says France's stagnant economy has been ravaged by the euro crisis and a decade of mismanagement.
The new Socialist government in France tackles its budget deficit - but with more taxes than spending cuts.
Socialist government has announced a big one-off increase in wealth taxes, by far the biggest single element in a €7.2bn package of new levies.
Jean-Marc Ayrault has called on the French people to rally behind the government to tackle a "crushing" and "unprecedented" debt crisis.
President Francois Hollande should make tough savings and public sector job cuts to meet a European deficit target, says the national audit office.