France's budget deficit said to balance itself in five years by Corina Ciubotaru

France, one of the E.U.'s founding members and the group's second largest economy hasn't been doing very well lately from an economic point of view. Prime Minister Francois Fillon has warned that the country is bankrupt, but President Sarkozy and the budget minister Eric Woerth think that the trade deficit problem is not major and can be fixed easily. The projected deficit for next year is 41.7 billion euro while the national debt is over one trillion euro, but Mr Sarkozy thinks the economy should be stimulated and it will bounce back by itself. After declaring there is no need for an austerity program, he proceeded to cut taxes including for homeowners and reduce the burden on the wealthy according to promises he had made during his presidential campaign. Some 458 million euro will be saved from the 22,921 public servants who will retire next year, while the sale of state properties and the increase in medical charges to reduce early retirement are said to bring another 600 million euro to the budget. Creators of this economic program think the budget will balance itself by 2012. His actions defying the PM's advice may be the signal of bigger problems between the two, but President Sarkozy also has some differences with the European Central Bank's president Jean-Claude Trichet. Their attacks in the press started after Sarkozy became President four months ago; he has been trying to take advantage of them being from the same country and persuade Trichet into lowering ECB rates.

related story: http://uk.news.yahoo.com/afp/20070926/tpl-france-politics-economy-budget-9eb7866_2.html

by Corina Ciubotaru for PocketNews (http://pocketnews.tv)

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