Sarkozy: Change Constitution to Limit Deficit

Sarkozy: Change Constitution to Limit Deficit
# 22 May 2010 02:41 (UTC +04:00)
Baku – APA. French President Nicolas Sarkozy Thursday said he wants constitutional changes to commit this and subsequent French governments to reducing deficits and promised strict controls in spending from 2011, APA reports quoting “The Wall Street Journal”.
France isn’t bowing to market pressure, but is taking a responsible approach to a problem with wider deficits stemming not just from the economic crisis, but from 30 years of rising debt and spending, Mr. Sarkozy said.
"From 2011 onwards, we will rigidly strengthen spending controls, we will not allow ourselves any generalized rises in taxes, we will go at the pace of the economic recovery and will pursue reforms that will put growth back on its feet," he said. "It’s not austerity, nor is it laxity, but responsibility."
The government has committed to reducing its deficit as a percentage of gross domestic product to 6% in 2011 and 4.6% in 2012, Mr. Sarkozy said, adding these objectives "must be respected." France’s deficit reached 7.5% of GDP in 2009 and is expected to hit 8% in 2010. By 2013 the government targets a deficit no higher than the 3% stipulated by the European Union.
The constitutional reform would oblige every elected government to commit to a five-year plan for the deficit and to a date by which public finances would be balanced.
Parliament’s powers to vote on public-finance commitments France makes to its European peers will be strengthened, Mr. Sarkozy said.
He reiterated plans announced by Prime Minister François Fillon to freeze state spending for the next three years, excluding charges on debt and pensions. Recurring state spending will be cut 10% by 2013, as the government continues to replace only half of retiring civil servants.
The reforms needed for the savings will be presented at a council between now and the summer, the president said. Public health-insurance spending will be limited to 3% in 2010 from 3.3% in 2009. The rise will be fixed at 2.9% in 2011 and 2.8% in 2012, Mr. Sarkozy said. Funding to local authorities will also be frozen, he added.
"Without budgetary adjustment, our growth and our social model are threatened. That is what lies behind the decisions I have presented," Mr. Sarkozy said.
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