French Finance Minister Francis Mer said in a newspaper interview published on Tuesday that his government was sticking to a goal of cutting the public deficit to 3.6 percent of gross domestic product this year and below three percent of GDP in 2005. Mer made the comments in an interview with the daily Le Monde which coincided with fresh information on how the public deficit surged to 4.1 percent of GDP in 2003, way above the three percent limit of the EU Stability and Growth Pact. Mer, who was in Brussels on Tuesday morning for the second day of a meeting with European Union colleagues, was quoted by the newspaper as saying many economists were betting on more than the 1.7 percent GDP growth he has forecast for 2004.
"This is why I confirmed the goal of 3.6 percent," he was quoted as saying, referring to what he had told his EU counterparts in Brussels. "I was also able to confirm our goal of a deficit going back under 3 percent in 2005." France's public deficit hit 3.2 percent of GDP in 2002 and will be over the EU limit for a third year in a row this year, and some are questioning whether the goal of getting back into line below three percent in 2005 is viable. Mer said the next big economic reform following an overhaul of the pension system would be an overhaul of the social security system -- which ran up a deficit of 9.4 billion euros in 2003, according to data released by national statistics office INSEE in Paris in Tuesday.///