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French debt on the rise

September 30, 2014

France's public debt has shot up to just over 2 trillion euros ($2.5 trillion) for the first time, according to official figures for the second quarter. National debt now stands at 95.1 percent of GDP.

Symbolbild Haushalt
Image: picture alliance/dpa

National Statistics Agency INSEE said on Tuesday that France's national debt reached 2.023 trillion euros, an increase of 1.1 percent compared to the previous quarter.

Total national debt now stands at 95.1 percent of gross domestic product (GDP), more than 35 percent higher than the EU's fiscal rules allow.

France has also been under fire for being unable to keep its budget deficit at or below 3 percent of GDP. The government had promised to reach the 3-percent threshold by next year, but has since pushed back the target until 2017.

Ahead of the presentation of the budget on Wednesday, the French finance ministry said it plans to reduce national debt with a mixture of savings measures and a growth strategy "based on CICE [a type of corporate tax credit - the ed.] and our Responsibility and Solidarity Pact."

France's economy has been at a standstill in the past six months, with unemployment stuck above 10 percent.

ng/hg (Reuters, AFP)