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Fiji Time: 4:31 AM on Thursday 17 April

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Politicians defend claims

Bbc.Co.Uk
Friday, February 01, 2013

FRANCE'S politicians are defending the health of its economy after Labour Minister Michel Sapin described the state as "totally bankrupt".

Finance Minister Pierre Moscovici said later Mr Sapin's comments were not "appropriate".

President Francois Hollande has promised to reduce its deficit to below 3 per cent of output this year from 4.5 per cent.

"Was it a gaffe or is the Socialist government softening up the French public for a difficult road ahead?" said BBC's Christian Fraser in Paris.

"Having devoted most of his first year to policies that appealed to his left-wing base, Mr Hollande is now facing the tougher decisions — cuts to public spending and labour reform. And his labour minister, Michel Sapin, has spelt out why it is required."

France's public debt total topped 90 per cent of the value of everything produced in the economy last year, well above the European Union target of 60 per cent. The president has generally favoured tax increases over spending cuts to plug the gap between government revenue and expenditure, including increasing the top rate of 75 per cent tax on incomes over $2.37m.