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French President Unveils First Budget

The government of French President Nicolas Sarkozy has unveiled the first budget since he took office, with spending under scrutiny following official warnings that France is nearly bankrupt.

Prime Minister Francois Fillon presented lawmakers with a draft showing a deficit of nearly $59 billion for 2008 - about the same as last year's shortfall. Economic growth projections were also unchanged, with forecasters predicting between 2 percent and 2.5 percent expansion.

Mr. Sarkozy has said he hopes to spur economic growth with a series of tax cuts for homeowners and financial incentives for employers to allow overtime hours.

European Union finance officials have voiced concern over the president's tax cut proposals, saying they could make it harder for the government to honor a pledge to balance its budget by 2010.

Last week, the European Central Bank warned that France is facing serious economic problems, with record deficits expected from excessive government spending. Mr. Fillon issued the bankruptcy warning earlier this month, as the president unveiled plans to overhaul pensions for some public employees.

 

Some information for this report was provided by AFP and AP .

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