July 10, 2017 / 10:37 PM / 10 days ago

French state to make 4.5 billion euros in savings this year: paper

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French Minister for Public Accounts Gerald Darmanin arrives at the Elysee Palace to attend the weekly cabinet meeting in Paris, France, May 24, 2017.Benoit Tessier

PARIS (Reuters) - French government ministries will tighten their belts to find 4.5 billion euros ($5.13 billion) in savings on their operational budgets this year, Budget Minister Gerald Darmanin told Le Parisien newspaper.

The interior and defense ministries will bear the brunt of the cuts, in steps meant to allow France to post a deficit below 3 percent of growth domestic product, honoring an EU-agreed limit for the first time in a decade.

"We have identified 4.5 billion euros in savings to bring the deficit below 3 percent this year on the state's budget alone," Darmanin told the newspaper, saying the government would not increase taxes or ask local authorities to contribute and that public services would not be affected.

Savings would include closely negotiating calls for tender and better managing a pool of official cars, he said. Some 850 million euros in savings would come from the defense ministry and another 526 millions euros from the interior ministry.

Darmanin said the government was looking at reforms of housing and vocational training policies with the goal of saving more next year.

Sources said on Monday that the government would push ahead in 2018 with tax cuts promised by President Emmanuel Macron, rowing back on comments from the prime minister that some could wait.

Macron's pledges to cut local property taxes and limit the scope of the wealth tax to property could put a strain on revenues in the years ahead.

($1 = 0.8776 euros)

Reporting by Ingrid Melander; Editing by Sandra Maler

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