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Budget

France sits on record mountain of public debt

France has admitted to having mounting problems to meet public deficit targets as weak tax revenue has spoilt plans to reduce debt levels. Fresh figures come as a blow to the president after disastrous local elections.

France's national statistics agency, INSEE, said on Monday that the country's public debt levels had risen further in 2013, amounting to a staggering 93.5 percent of gross domestic product (GDP). That compared with 90.6 percent in the previous year.

The news dealt another blow to President Francois Hollande, whose Socialist party was trounced by the center-right UMP and the far-right National Front in local elections.

INSEE reported French public deficit came in at 4.3 percent last year, compared with 4.9 percent in 2012, but still higher than the 4.1 percent forecast in earlier government estimates.

No more leniency from Brussels

France is the eurozone's second-largest economy, with the state of its public finances being closely watched by its partners and Germany in particular.

Socialists slump to defeat in French municipal elections

French Finance Minister Pierre Moscovici acknowledged he was concerned about the figures, adding that fresh borrowing could not be reduced as quickly as planned because of slumping tax revenues.

Paris will now have to find additional ways of bringing down public deficit, with a view to meeting EU requirements of staying below a fresh borrowing rate of 3 percent of GDP. The European Commission has already given France two additional years to meet that target.

hg/jr (AFP, Reuters)

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