French debt to hit nearly €2 trillion

France’s public debt will reach nearly two trillion euros by 2014, despite President Francois Hollande’s plan to cut spending, a new report says.

The report by Le Figaro daily on Tuesday, said the French government plans to announce next week that the debt will reach ‚1.95 trillion by the end of 2014, or 95.1 percent of the country™s Gross Domestic Product (GDP), which is higher than previous government estimates.

Public sector debt, including central government, welfare and local authority debt, stood at 90.2 percent of GDP at the end of last year. The French government had been counting on public debt to peak in 2014 at 94.3 percent of GDP.

In an interview with France 2 television about the report, Finance Minister Pierre Moscovici admitted that the debt would “reach a maximum and then start to fall.”

Moscovici blamed the country™s high debt figure on Hollande’s conservative predecessor Nicolas Sarkozy, saying the debt was already running at more than 90 percent of GDP when the current Socialist government took over in 2012.

However, the new figure amounts to a rise of more than ‚120 billion in public debt over two years, according to the report.

European Union rules require public debt to be no more than 60 percent of GDP or falling towards this ratio.

Last Wednesday, Moscovici said that France™s public deficit this year would reach 4.1 percent of the French gross domestic product (GDP), missing the target it agreed with the European Union for 2013.

The European Commission in May granted France two more years to bring its public deficit back under the EU ceiling of 3.0 percent of GDP.

The commission said that the eurozone™s second-largest economy should slash its public deficit from 4.8 percent of GDP in 2012 to 3.9 percent in 2013 and then 3.6 percent in 2014.

France is struggling to revive its economy and tackle rising unemployment, which has risen to above three million in the second quarter of 2013.

In an attempt to lower the country™s huge debt load, the French government has increased taxes and implemented several reforms and spending cuts. However, the measures have proven unproductive since the financial crisis in the eurozone has not been resolved and the euro area is still bogged down in recession.

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Copyright: Press TV