PARIS, March 15 (Reuters) - French central bank governor Francois Villeroy de Galhau on Thursday rejected the idea stronger-than-forecast growth last year had generated a “windfall” that the government could spend, reiterating the public expenditure needed to be hauled lower.
The government forecasts the 2017 budget deficit will come in at between 2.7 and 2.8 percent of national output, rather than a previously estimated 2.9 percent.
President Emmanuel Macron and his finance minister have said the priority is to pay down debt.
Yet as Macron’s popularity has started to fall, there have been growing calls, including from within his party, for the “windfall” -- as it has come to be known -- to be in part spent.
“In France there is nothing that resembles a windfall. On the contrary, there is a hole,” Villeroy told BFM Business.
“We still have the highest public debt in Europe after Italy,” he said. “We still have the highest public deficit in Europe, and we must urgently redress our public finances, we must urgently cut our public spending relative to national wealth.”
Villeroy said France could not push for euro zone reform without getting its own finances in order. (Reporting by Richard Lough and Sophie Louet; Editing by Sudip Kar-Gupta)
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