French Budget 2002

French Budget 2002 proposed a high level of budget deficit amounting to almost 46 billion Euro. The budget also predicted an economic growth of approximately 1.5%.

Main Declarations of the French Budget 2002:
French Budget 2002 proposed that the economy would record a budget deficit of 46 billion Euro. This suggested a 50% increase in the budget deficit of the country. With this substantial increase in Budget Deficit, there was every chance that the French Economy would cross the budget deficit limits set by European Union.

The French Economy was supposed to pay fines in case of breaching budget deficit limit. But, the Government of France assured that the budget deficit would stay within the 3% upper limit set by the Stability and Growth Pact of the European Union. There were expectations that, this high level of budget deficit would amount to almost 2.6% of Gross Domestic Product of the French Economy.
Other than the high level of Budget Deficit, the French Budget 2002 proposed an economic growth of near about 1.5%. The Government of France declared, that they would try to reach a zero budget deficit by the year 2004.

Reasons behind the High level of Budget Deficit:
For the high level of budget deficit, the French Budget Minister accused the predecessors. He opined that, the his predecessors failed to introduce right kind of financial reform, when the country was experiencing economic growth. Moreover, they constructed and implemented an employment policy, on the basis of credit; which proved to be too much expensive for the French Economy.

Another reason for the high level of budget deficit was low level of Tax Receipts. It can be mentioned here, that a Budget Deficit, represents the shortfall between Government Income and Government Spending. The Government Income is generated through the revenue collection by the government. The French Budget of 2002 proposed a high level of budget deficit, as low level of tax revenue contributed a substantial part of the budget deficit. It can be said that, out of the 46 billion Euro Budget Deficit, almost 10 billion of deficit was generated due to low level of tax receipts.

Other than the high level of Budget Deficit, the French Budget 2002 proposed an economic growth of near about 1.5%. The Government of France declared, that they would try to reach a zero budget deficit by the year 2004.

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