French economy minister says speinding cuts needed

PARIS

French Economy Minister Bruno Le Maire has said he was determined to seek billions of dollars in new government spending cuts after ratings agency Standard and Poor's downgraded France's credit score.

The U.S. agency justified its decision to drop France's long-term sovereign debt rating from "AA" to "AA-" on concerns over lower-than-expected growth.

S&P is among a host of agencies and economists to cast doubt on the government vow to cut its budget deficit to under three percent of gross domestic product by 2027.

Le Maire launched a media campaign after the May 31 announcement to defend the government's spending record.

He vowed to "continue exactly on the same path, without accelerating or slowing", in a video posted on YouTube on June 1.

In interviews with French media, Le Maire ruled out tax increases. But he said no decision had been made on delinking pensions and other social benefits from the inflation rate.

The minister put the priority on reducing France's more than 450 billion euros ($488 billion) in state spending each year.

He highlighted 10 billion euros in spending cuts decided at the start of the year and said he was determined to find another 10 billion in savings in 2024.

The government does not have a parliamentary majority and Le Maire said the S&P decision had to "open the eyes" of French lawmakers on the need for savings.

S&P warned that "political fragmentation" would make it difficult for the government to implement reforms to balance public finances.

France's general government debt will increase to about 112 percent of GDP by 2027, up from around 109 percent in 2023, "contrary to our previous expectations", S&P said.