Source AP ©

France takes 1 place among EU countries in money spending

Recently France was called Europe's "No. 1 spender" whose public finances were worrisome.

Bringing more bad news, French Health Minister Roselyne Bachelot said on Canal Plus television Sunday that the country's social security deficit for 2007 will be around 12 billion EUR(US$16.7 billion) instead of the 8 billion EUR(US$11.1 billion) previously forecast.

Trichet, speaking later on Europe-1 radio, defended Prime Minister Francois Fillon for saying last week that France is "in a state of bankruptcy," a statement that raised eyebrows here.

"Public finances are in very great difficulty," said Trichet, who is French, and Fillon "probably was right to underscore that."

Paris is "the No. 1 spender of Europe," Trichet said.

He said that in 2007, in comparison to its GDP, France will spend the most among the 27 EU countries in public funds - 9 percentage points more than Germany, 5 more than Italy and 15 more than Spain.

Trichet noted, however, that corrections are possible, giving an indirect nod to President Nicolas Sarkozy's plan for vast across-the-board reforms that include reducing the number of civil servants and cutting special retirement benefits in certain sectors.

France's 2008 social security budget is to be announced on Monday, and the overall budget unveiled on Wednesday.

The budget foresees growth in 2008 at 2.5 percent to 3 percent - considered too optimistic by many. For this year, the European Commission sees a growth rate of only 1.9 percent this year, while the government talks of a 2 percent to 2.5 percent rate of growth.