France to cut state spending to balance budget by 2016

The French government announced on Monday new spending cuts and tax hikes to reduce next year's deficit and balance the budget by 2016. French Prime Minister Francois Fillon said after a Cabinet meeting that the government's new austerity measures, the toughest for the country since the end of World War II, were required to save over 100 billion euros to achieve a deficit-free budget by 2016. French President Nicolas Sarkozy announced in late October that economic growth was slowing in France and the country's GDP was expected to grow by only one percent in 2012 instead of the expected 1.75 percent, prompting the government to work out new austerity measures to cut the budget deficit. The French government will have to cut the budget deficit to 4.5 percent of GDP in 2012, three percent of GDP in 2013 and two percent of GDP in 2014 to reach a balance of revenues and expenditures by 2016, Fillon said.