Hollande to Fall Short on Plan to Trim French Public SpendingMark Deen
The French government indicated it probably won’t achieve plans to trim public spending next year that are key to President Francois Hollande’s effort to overhaul the nation’s economy.
Finance Minister Michel Sapin said the target of cutting spending by 21 billion euros ($28 billion) in 2015 may be reduced because inflation is too low.
“We can’t have the same objectives with inflation getting so weak,” Sapin said in an interview with Agence France-Presse that was confirmed by his office.
His remarks underscore the hurdles facing both Hollande and European policy makers in the face of euro area inflation that slowed to 0.3 percent in August, the lowest since 2009, and an economic recovery that is stalling.
European Central Bank President Mario Draghi said last month that he’ll use “all available instruments” to ensure price stability and called for “a large public investment program” in Europe. Draghi and Hollande met yesterday in Paris.