February 15, 2018 / 10:15 AM / 6 months ago

France to reduce debt burden in 2018 - finance minister

PARIS (Reuters) - France’s government will take measures this year to reduce its debt burden in anticipation of higher interest rates, Finance Minister Bruno Le Maire said on Thursday.

French Finance Minister Bruno Le Maire speaks during a news conference after a meeting about Lactalis baby milk contamination scandal at the Bercy Finance Ministry in Paris, France, January 12, 2018. REUTERS/Gonzalo Fuentes

Le Maire told a conference at the Finance Ministry that there was no doubt that interest rates would rise by the end of the year and the only question was by how fast.

“We have to reduce our debt because it exposes us to an increase in interest rates ... and we will take a certain number of measures in 2018 to go in this direction,” Le Maire said on a panel with IMF chief Christine Lagarde.

He added that a one percent rise in interest rates cost taxpayers 3 billion euros (2.66 billion pounds) in extra debt servicing costs. France’s 10-year benchmark government bond yields currently stand at 1.0 percent, the highest since March 2017. FR10YT=TWEB

France’s budget currently foresees a public debt ratio of 96.8 percent of gross domestic product this year before it peaks in 2019 at 97.1 percent.

The government has already said that if tax revenues proved better than expected, the extra funds would be used to reduce the national debt.

Le Maire told journalists that debt reduction measures could go beyond that but he declined to elaborate further

“If there is any money available it will be used to reduce debt,” Le Maire said.

Reporting by Leigh Thomas and Yann Le GuernigouEditing by Sudip Kar-Gupta

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