France has officially presented its 2013 budget on Friday with austerity measures that aim at bringing the deficit to 3 percent of the Gross Domestic Product (GDP).

French President Francois Hollande has described it as the largest effort of the last thirty years.

In an interview on the France 2 TV network, Prime Minister Jean-Marc Ayrault described it as a "combat budget." The budget includes measures that are expected to close the budget gap by €30bn, with €10bn coming from spending cuts, €10bn from new taxes on companies, and €10bn from new taxes on households.

Finance Minister Pierre Moscovici reiterated on Europe 1 the country's commitment to reducing the deficit to 4.5% in 2012 and 3% in 2013. He said that meeting the target was necessary for the country's credibility, otherwise, interest rates will rise and the country will arrive at the same situation as in Italy and Spain.

Moscovici insisted that middle and low-class incomes were protected from most of the tax increases, which will affect around one in ten tax payers.

In spite of the efforts being taken, many analysts believe that the deficit targets are too optimistic because they are based on an economic growth forecast of 0.8% for 2013.

Nonetheless, Moscovici labelled the target "realistic and ambitious."

"This is a fighting budget to get the country back on the rails," he said. "It is a budget which aims to bring back confidence and to break this spiral of debt that gets bigger and bigger."

MJ

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