Chirac, Juppe To Juggle With French Budget

The budget is expected to be unveiled on September 18 but there is little sign so far of the economic growth that the government needs to help balance the books. At the same time, an almost palpable bad mood is likely to descend on the country after the mass holiday exodus of August. Several union leaders have already talked of protest after the August break. But many experts are cautious about predicting a repeat of the social unrest and strikes that cripplied the country late last year in response to austerity measure and welfare reforms.

The main lines of the 1997 budget are already known. Juppe said this month government spending would be no higher than in 1996 at Ffr 1.552 trillion ($305 billion), which implies cuts of at least Ffr 60 billion because of inflation and other automatic spending rises.

 

The government has identified where half of this will come from, including scrapping job creation incentives judged to be inefficient and 7,000 civil service job cuts.

. Where the balance of the cuts will fall is not yet clear.

Finance minister Jean Arthuis has said he will deliver tax reductions effective from next year after a pledge by Chirac in July