... President Francois Hollande’s new government which requested the Court to conduct a thorough review of state finances.
But the expected shortfall in tax revenues, while in line with economists’ predictions, is threatening deficit goals. The numbers leave left-leaning President Hollande with the tricky task of explaining to voters, just seven weeks after he took office promising an end to austerity, that sweeping costs cuts are inevitable after all.
The government plans tax rises on the wealthy and on companies to adjust the 2012 budget, but unpopular welfare and civil service job cuts are likely next year.
M. Hollande’s approval rating has already sagged by seven points to around 51% as the public fears more economic gloom.
The government will revise down official growth forecasts as it uses the audit to rework the 2012 budget, said Finance Minister Pierre Moscovici in a newspaper interview.
Meantime, The Court of Auditors said it had not uncovered any new skeletons left by the former conservative government of President Nicolas Sarkozy. It pointed to €1.2 to €2.0bn of likely overspending this year in areas such as defence, agriculture and housing, claiming, however, that this is normal[!].
Read the unabridged France24 article.