More Arms, Less Welfare: French Budget Is Security First

France’s Socialist government set out its priorities for the 2016 budget: more security, less welfare.

Finance Minister Michel Sapin said Thursday he will cut healthcare and housing costs next year as President Francois Hollande targeted an extra 3.8 billion euros ($4.3 billion) in defense spending over the next four years. Hollande wants to beef up security in France after the January terrorist attacks, while the country’s multiple overseas military operations are increasing the demands on the armed forces.

“It’s legitimate that the priority goes to security,” Sapin said on Europe 1 radio today. “We can make savings without cutting on solidarity,” he said.

The Defense Ministry may be among the few government departments that don’t take a hit in 2016 as France tries to meet its a promise to bring the deficit down to 3.3 percent from the 3.8 percent planned this year. The euro-zone’s second-largest economy is under pressure from the European Commission to get back in the line after breaching the Maastricht Treaty’s 3 percent deficit threshold for seven straight years.

The Ministries of Defense, Justice, Education and Interior are spared from the cuts in the draft budget targets Prime Minister Manuel Valls sent to the members of the government last week end, according to a French Finance Ministry official.

Spending Cuts

The state has already set a target of 21 billion euros in spending cuts for this year, including 7.7 billion euros for its ministries. Sapin expects France’s economy to expand at least 1 percent.

Hollande said Wednesday that the 31.4 billion-euro defense budget will get an extra 600 millions euros next year, rising every year after that and reaching as much as 1.5 billion euros in 2019. Staff cuts won’t be as sharp as initially planned and the ministry will be able to keep 18,500 jobs over the next years.

France has revised its spending priorities since the January terrorist attacks in and around Paris that left 17 people dead. Security forces are still on maximum alert in the capital and 7,000 troops are deployed across the country to protect the most sensitive sites. Authorities thwarted an attack on churches near Paris on April 22.

The housing budget, which includes subsidies for families and students as well as incentives for home builders, will be reduced and the ministry in charge will be asked to better allocate its resources, according to the Finance ministry.

Healthcare, which already faces this year’s biggest spending cuts, will be at the center of the savings effort in 2016. France’s healthcare system is expected to post a deficit of 6.9 billion euros this year.

Hollande’s ministers have until early July to sketch out how they will use their resources in 2016.

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