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French public debt rises to 66.6 per cent of GDP

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French public debt rises to 66.6 per cent of GDP

Photo French President Nicolas Sarkozy

(PARIS) - France's public debt rose to approximately 66.6 percent of gross domestic product in the second quarter from 65.4 percent in the first quarter, official data said Friday.

The second-quarter debt stood at 1,216.4 billion euros (1,724.04 billion dollars), the INSEE statistics institute said.

President Nicolas Sarkozy's government on Wednesday unveiled a first budget since taking office that shied away from attacking France's huge deficit despite warnings that the state was bankrupt.

The budget projected the public debt for all of 2007 would be 64.2 percent of GDP, then fall to 64.0 percent next year. The economy ministry said Friday it maintained that forecast.

The overall deficit -- which includes social security, local government budgets and the state budget -- will inch downwards to 2.3 percent of GDP for 2008 from 2.4 percent of GDP in 2007, according to the government.

A country's public deficit is the difference between state revenues and public spending. The public debt is the cumulation of past annual spending deficits.

France's debt ratio has risen in recent years in breach of eurozone rules that debt must be no greater than 60.0 percent of output or be falling consistently and structurally towards this ceiling.

INSEE cautioned that its latest debt figures were provisional and could be revised.

It noted that the data released Friday took into account the changes requested by EU statistics Eurostat in its method of calculating the public debt, notably in the way the debt of state-owned railway operator SNCF is accounted for.

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