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France to slow deficit reduction, will respect targets - minister

Published 17/04/2014, 08:00

PARIS (Reuters) - France has won backing from its European partners to slightly slow the reduction of its public deficit, but it will respect its EU-imposed deficit targets, French Finance Minister Michel Sapin said on Thursday.

The French government aims to bring the deficit in line with an EU limit of 3 percent of national income next year, a target most economists consider out of reach.

The government has fallen behind on deficit reduction after the hole in the public finances came to 4.3 percent last year, missing its target of 4.1 percent.

Sapin said he had not sought backing from Brussels for extra time to cut the deficit, but rather had discussed and "partly" won support for changing the speed at which the deficit is reduced.

"The pace is modified. It's been discussed with our European partners so that it's well understood," Sapin said on RTL radio. "We have a slightly slower-than-planned pace of deficit reduction, but obviously we will respect all of our commitments."

The government will give details next Wednesday of its latest long-term deficit-reduction plans, which will be submitted to Brussels to determine whether France is respecting its budget targets.

France has little wiggle room for cutting the deficit more slowly while still keeping public finance on course for meeting the 3 percent target.

Sapin and other French officials have said they never wavered over the budget targets, rejecting press reports they had tried earlier this month to lay the ground for renegotiation but had been slapped down by Brussels.

France already received two extra years to meet the 3 percent target, and the European Commission and Berlin have little stomach for granting more time.

(Reporting by Leigh Thomas; Editing by Larry King)

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