No austerity measures for France: Sarkozy

French Prez Nicolas Sarkozy rejected the claim that his govt was adopting austerity measures.

Updated: May 11, 2010, 00:29 AM IST

Paris: French President Nicolas Sarkozy on Monday rejected the claim that his government was adopting austerity measures after it announced a three-year spending freeze.

"We have a clear objective, which is to clean up our
public finances," Sarkozy told a meeting of union and business
leaders at the Elysee palace.

"That was our objective before the financial crisis and
it remains so. We have not changed tack. We are maintaining
our strategy."

Prime Minister Francois Fillon last week announced a
freeze on public spending for the coming three years, from
2011 to 2013, to get France`s soaring budget deficit under
control.

Opposition politicians accused the government of opting
for an austerity programme and said ordinary families would
have to brace for painful cuts.

"Some of our partner countries, which are under threat,
have announced austerity measures. Some see a similar shift in
our economic policy. But I reject this interpretation," said
Sarkozy.

"We must not implement a policy of austerity, but rather
a responsible policy. There is credibility at stake."

Like most European Union countries, France has seen its
deficit exceed the EU limit of three per cent of output as it
has taken costly measures to climb out of recession. Its
deficit is expected to hit eight per cent this year.

The government has set targets to reduce it to six per
cent in 2011 and get it under the three percent required by EU
regulations in 2013.

The government is already planning to make cuts by not
replacing one in every two retiring civil servants. It faces a
tough battle with unions meanwhile over its plan to raise the
retirement age and reform pensions.

Sarkozy argued that raising the legal retirement age, now
60, would be the answer to salvaging the pension system, which
this year will have an 11-billion-euro deficit.

He pledged to implement a fair reform of pensions and
said "an additional effort will be required from high-income
earners and capital holders".

A series of special benefits rolled out for struggling
families last year at the height of the economic crisis will
not be renewed, Sarkozy added.

"After the considerable effort that was made during the
crisis. We must now engage in an effort to shore up our public
finances," he said.

PTI