France's low-key austerity: Sarkozy's government prefers piecemeal cuts to grand savings plans

PARIS – PARIS (AP) — Officially, France has no single grand plan to cut the enormous national debt that has contributed to fears about Europe's financial stability.

Bit by bit, though, President Nicolas Sarkozy's government has revealed that it's putting the squeeze on billions of euros of spending. While neighbors including Germany, Britain and Spain have publicly announced sweeping programs for tens of billions in cutbacks, Sarkozy and other French leaders have announced savings plans one-by-one, often in private meetings and always avoiding the word "austerity."

That's because many here consider the word an epithet, and governments left and right have traditionally preferred to spend their way out of crisis. Sarkozy is breaking with that tradition, but seems too afraid of public protest — or resistance within his own party — to say so.

Greece, where Europe's debt crisis began, has announced austerity measures worth euro30 billion ($37.6 billion) through 2012 — including public service and pension pay cuts and higher taxes. Since then bigger economies have joined in, such as Germany with a plan to save euro80 billion by 2014 and Britain has announced plans to save 50 billion pounds a year.

Prime Minister Francois Fillon told lawmakers in a private meeting of lawmakers from his conservative UMP party that the state will cut spending by euro45 billion over the next three years. The statement was later reported to French media.

The cutbacks that Sarkozy has most loudly championed are those targeting his own ministers, who have come under recent scrutiny for profligate habits including billing the government euro12,000 for cigars and euro116,000 to rent a private jet. Last week, Sarkozy ordered them to ax "unjustified or excessive expenses," ending the use of state money to hunt on the grounds of a chateau every year, slashing the number of official cars and telling ministers to travel by train instead of plane when possible, and not take so many people along when they go.

These will only produce nominal savings, however.

The budget will get a bigger boost from cuts to tax breaks for the wealthy and corporations. Those were initially estimated to produce savings this year of euro5 billion, a figure that Budget Minister Francois Baroin raised to euro10 billion on Wednesday.

Among 150 measures that were announced privately at a Cabinet meeting is cutting 100,000 state sector jobs between 2011 and 2013 by not replacing half of retiring workers, expected to save euro3 billion. This comes on top of cuts that Sarkozy is seeking in regional and local budgets.

Economist Jean-Herve Lorenzi said Saturday that France has an "outdated vision" of explaining economic decisions to the public.

"We are convinced that in France, and it's a weakness, that a truth announced progressively is easier to swallow than a truth told clearly," he said.

Conservative French lawmaker Jean-Francois Cope said it was time for saving and budget austerity "is not a curse word."

"I think the French are asking us to take responsible decisions," he said.

Sarkozy's government is also planning to raise the retirement age from 60 to 62 in a reform to an overstretched pension system. The plan has been in the works for years but some 800,000 people took to the streets 10 days ago to protest it — illustrating Sarkozy's worries about pushing the French too hard to tighten their belts. Public protests have brought down pension reforms, and governments, in the past. Unions walked out of negotiations with the government a week ago on a proposed freeze on public sector salaries.

France's overall budget this year foresaw euro384 billion in spending but just euro268 billion in income, for an 8 percent deficit. Sarkozy has pledged to make that 3 percent in 2013 to adhere to European Union rules, without explicitly explaining how he would do it.

Meanwhile the country's debt is huge and growing: It climbed euro46.5 billion in the first quarter to stand at euro1.5 trillion euros, or 80.3 percent of gross domestic product, according to figures released Wednesday.

Many of the cuts must go to France's parliament later this year as part of the 2011 budget. Economists question whether they will be enough to soothe worried markets, or meet Sarkozy's own deficit-cutting targets.

Perhaps because of those concerns, Sarkozy has taken another tack on austerity overseas.

He joined other European leaders in arguing for budget tightening at summits of world leaders in Canada a week ago. President Barack Obama has favored stimulus over austerity, and some worry that Europe's cutbacks will stifle post-recession recovery. The leaders agreed to reduce government deficits in richer countries in half by 2013, with wiggle room to meet the goal.

Martine Aubry, who leads the opposition Socialists and hopes to challenge Sarkozy for the presidency in two years, called the cutbacks in public sector spending "inept and brutal" and said they would increase insecurity and school failure. Still, even she added, "Of course, we must make savings. We have a deficit and a debt that are catastrophic."

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Associated Press Writer Emma Vandore in Aix-en-Provence contributed to this report.