Pierre Moscovici

Government has struck a deal with fuel suppliers to cut petrol and diesel prices by 6 euro cents a litre for the next three months.

French and German finance ministries to launch a working group to make joint proposals on issues such as fiscal and banking union.

On July 25 government will unveil plan to support the country's auto industry, including measures designed to boost spending on cars.

The new government has warned it will cut its economic growth forecasts for this year and next, which could point to a need for greater austerity.

The country must find up to €10bn of savings to bring its budget deficit under control this year, finance minister Pierre Moscovici has said.

New finance minister Pierre Moscovici says there has been a lack of credibility for France over the public deficit and adds: "We're being watched".