French Social Security Deficit to Reach 11.7 Bln Euros This Year

AFX News Limited

France

September 23, 2007 

The French government is expecting its social security deficit to widen this year to 11.7 bln eur from 8.7 bln in 2006, Le Journal du Dimanche reported.

The Sunday newspaper, which did not indicates its sources, said the worsening deficit this year largely reflects a 2 bln eur increase to 6.2 bln in the deficit for the health insurance system. The pensions system will also see its deficit widen to 4.6 bln eur this year, according to the paper.

The government is due to announce tomorrow the 2008 social security budget, which covers health care, pensions, workplace accidents and financial support for families.

A similar figure of 12 bln eur for this year's social security deficit was given in July in a report from social security accounting commission.

The French government, which had previously targeted a deficit of 8 bln eur for this year, is now aiming to bring the deficit down to 8.9 bln eur in 2008, Le Journal du Dimanche said.

In order to reign in the spiralling deficit, the authorities are notably planning to introduce non-refundable premiums for patients to cover part of the cost of medical treatment. 

To reduce the pensions deficit, French president Nicolas Sarkozy said this week he plans to tax companies more heavily when they offer early retirement, while also ending mandatory retirement for employees at 65.

The conservative government has also announced a crackdown on tax and benefit fraud, with president Sarkozy claiming this costs the state 30 bln eur annually.

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