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Friday, 29 June 2012 - French government to cut staff, operating costs: PM |
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See the best of Reuters photography.  See more | Photo caption  Raging wildfires Raging fires strike Colorado and Utah.  Slideshow  Health in America An essay of photos taken by Reuters photographers during assignments on health care.  Slideshow  French government to cut staff, operating costs: PM Tweet Share this Email Print Related News French minimum wage rise turns sour for Hollande 3:40pm EDT Analysis & Opinion Essential reading: Camp vows Republicans will resist tax revenue increases, and more Both sides losing austerity fight Related Topics World » France » PARIS | Thu Jun 28, 2012 3:40pm EDT PARIS (Reuters) - France's new Socialist government will cut staff at most ministries by 2.5 percent annually for the next three years as it seeks to reduce its budget deficit to meet European Union targets, the prime minister's office said on Thursday. Prime Minister Jean-Marc Ayrault also wrote in a letter to the ministries that government operating costs - which exclude staffing but cover things like car fleets and office supplies - would drop by 7 percent on average in 2013 versus 2012. Ayrault, however, did not provide a target figure for overall central government spending. Ayrault is poised to submit an adjusted budget to his cabinet on July 4, with an expected 7.5 billion euros in tax hikes to counteract lower state revenues due to flagging growth, government sources have told Reuters. Economic growth is falling short of a 0.7 percent estimate on which the previous conservative government had based its 2012 budget, making it crucial to curb spending while raising new revenues. France's six-week-old government has vowed to steer clear of austerity measures, but still needs to plug a budget shortfall of 7-10 billion euros if it wishes to meet its deficit target of 4.5 percent of gross domestic product for 2012. To comply with an EU-mandated deficit target of 3 percent in 2013 the government will likely need to find some 20-30 billion euros, depending on the level of economic growth. Ayrault said the government's operating costs in 2014 and 2015 would each drop by 4 percent over 2013 and 2014, respectively. Also on the chopping block, and included in the operating cost target, are special funds given to ministries that help pay for one-off contingencies, such as subsidies to farmers or employment incentives. The health, education and interior ministries - which the Socialists have identified as priorities - will be excluded from the staff reductions. But the Socialist government is still committed to a campaign pledge of creating 60,000 new teaching jobs over his five-year mandate, a move that is sharply criticized as impractical and expensive by the opposition. Labor Minister Michel Sapin has said that, taking the new hirings into account, the overall level of government staffing will remain flat. Immediately upon taking office, President Francois Hollande cut his own pay and that of his ministers by 30 percent, a symbolic move to show that France was committed to controlling government spending. (Reporting By Elizabeth Pineau, writing by Nick Vinocur and Alexandria Sage; editing by Daniel Flynn, Ron Askew) World France Tweet this Link this Share this Digg this Email Reprints   We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (1) mulholland wrote:   Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter   Facebook   LinkedIn   RSS   Podcast   Newsletters   Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us   Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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