French tax cuts will not be at expense of deficit targets: finance minister

[PARIS] French income tax cuts promised earlier this month by President Francois Hollande will not come at the expense of the country's deficit reduction targets, Finance Minister Michel Sapin said on Monday.

"We will cut taxes - that's not to increase them elsewhere," Mr Sapin said on France Info radio.

"Secondly, we won't modify our deficit reduction targets." The French government is targeting a public deficit of 3.8 per cent of GDP in 2015 and 3.3 per cent in 2016, down from 4.0 per cent last year. The targets are part of its undertaking to European partners, who want the country to get its deficit back below the three per cent target for eurozone countries.

Mr Sapin said he would not confirm or deny a report in Monday's Les Echos newspaper which valued the tax cuts Mr Hollande promised for 2016 at around two billion euros (S$3.17 billion), but he went on to say: "Have confidence in us. There are the means within the considerable sums spent by the state, local authorities and social security spend to find two billion to give back a part of the efforts of the lowest-paid French people... two, three four, take the figure you want."

REUTERS