France Wows Skeptics With A 100 Billion Euro Austerity Plan

Some information on how France is going to implement fiscal austerity is out today. Link to Yahoo! article here. Excerpt:

"While France's credit rating so far has remained under relatively light criticism, as compared to many other Eurozone nations, the nation's budget deficit this year isn't pretty at 8% of GDP.

The government appeared slow to introduce austerity measures aimed at correcting France's long-term unsustainable spending path.

Now they've taken a large step in proving the skeptics wrong, announcing a three-year budget plan aimed at bringing France's budget deficit down to 3% of GDP by 2013."

Then it goes on to say:

Fillon said the government would cut the public deficit by 100 billion euros, with half coming from slashing spending and half from increasing revenues.

The prime minister broadly outlined where the savings would come from, including 45 billion euros in spending cuts and five billion euros from closing tax loopholes.

The centre-right premier is also counting on a rebound in the economy to bring in an additional 35 billion euros.

"As and when growth returns, revenues will grow once again," said Fillon."

It's hard to see how growth could return when the French government is implementing a E45B cut in spending.