PARIS (Reuters) - The French government needs to make sure there is no lag between planned cuts in taxes and in spending, otherwise it may not hit its fiscal targets, Bank of France Governor Christian Noyer said on Monday.
President Francois Hollande's government said last week it would cut the public sector deficit slightly more slowly than previously planned, but would still respect its pledge to meet an EU target of 3 percent of national income next year.
"Timing is absolutely crucial," Noyer said in an annual letter to Hollande.
"If there is a lag between the reduction in taxes and the reduction in spending, the resulting increase in the budget deficit could jeopardise the country's fiscal trajectory and undermine the credibility of its entire economic programme."
France's EU partners fear it may miss its 2015 deficit deadline, a concern that has grown since the government moved to slow its deficit reduction path.
The European Commission, which polices member states' public finances, has already granted France two extra years to meet the EU deficit target and hinted it will not grant any more leeway.
The Socialist government plans to phase out 30 billion euros (24.71 billion pounds) in payroll taxes paid by companies while it also wrings 50 billion euros in savings from the budget over the next three years.
The government is also counting on easing the tax burden on companies and households by more than 10 billion euros over the next three years.
Noyer said more savings than currently planned could be wrung out of France's huge social security spending, pointing the finger in particular at local government as ripe for belt-tightening.
Driven mainly by a growing wage bill, spending by local administrations rose nearly 14 percent between 2007 and 2012, compared with 11.2 percent for the central state, Noyer said.
While keeping public sector wages in check was vital, ultimately the number of civil servants needed to be cut back, Noyer added.
Despite a partial freeze on wages, the public sector wage bill rose by 5 billion euros last year, which Noyer said was equivalent to the savings generated by low interest rates on public debt.
(Reporting by Leigh Thomas; Editing by John Stonestreet)