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France can do more to rein in spending - central bank chief

Published 24/10/2014, 07:49
© Reuters France's President Hollande arrives at the European Council headquarters ahead of a EU summit in Brussels

PARIS (Reuters) - France could make more budget savings next year than planned, but should concentrate on achieving those already in the works, the central bank governor said on Friday.

France is cutting its public deficit less quickly than promised to its EU partners, raising the chances that the European Commission will reject its 2015 budget and ask for amendments.

President Francois Hollande said early Friday in Brussels that the Commission had asked for more information on the budget but ruled out making bigger savings than the unprecedented 21 billion euros (16.59 billion pounds) already planned.

"We could without doubt get more savings out of our spending, but I would like to see that first we do the 21 billion that have been announced. That seems the most important to me," Bank of France governor Christian Noyer said RTL radio.

Hollande's Socialist government is wary of trying to squeeze more savings out of the budget on the grounds that tougher belt-tightening could undermine a fragile economic recovery.

"It's true we have to find the right balance between necessary improvement in public finances, which must be regular and credible, while not snuffing out economic activity," Noyer said.

Noyer said that France and Italy were not seeing stronger growth because they had fallen behind on economic reforms while even stronger Germany needed to do more to boost demand, in particular by stepping up investment.

© Reuters. France's President Hollande arrives at the European Council headquarters ahead of a EU summit in Brussels

"We can't expect everything to come from Germany, we have to do our reforms," Noyer said.

(Reporting by Leigh Thomas; editing by Mark John)

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