Fillon Says France Will Continue to Cut Deficit

France will maintain efforts to reduce the deficit and overhaul its tax system, Prime Minister Francois Fillon told parliament.

He said the country’s tax burden won’t rise and reconfirmed the government’s target for the deficit to drop to 6 percent of output next year and 4.6 percent in 2012 due to spending cuts. France is budgeting for a shortfall of 7.7 percent of gross domestic product in 2010.

“We must cut our deficit to maintain our low interest rates,” said Fillon, who was presenting his government’s program after being asked by President Nicolas Sarkozy last week to head a reshuffled Cabinet. “We must control our budget deficit in the name of national independence.”

After his speech, the National Assembly voted its confidence in the new government by a margin of 326 to 226.

The financial crisis facing the Greek and Irish governments shows the need for countries in the euro region to harmonize their taxes, Fillon said. He called France’s tax system a “masterpiece of complexity” and said the overall tax burden and direct taxes on companies were above the European average.

“Our economic and financial credibility must be as strong as our neighbor’s,” he said, referring to a report commissioned by his government about aligning France’s taxes with Germany’s. “The tax system must serve our competitiveness, and justice, and it must be as simple as possible,”

Fillon repeated that French growth will be more than 1.5 percent this year and close to 2 percent in 2011.

To contact the reporters on this story: Gregory Viscusi in Paris at; Mark Deen in Paris at

To contact the editor responsible for this story: James Hertling at

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