LOC10:59
07:59 GMT
PARIS, Sept 28 (KUNA) -- France's burgeoning public debt rose by 43.2
billion Euros (USD 55.5 billion) in the second quarter of 2012 and now stands
at 1.83 trillion Euros (USD 2.35 trillion) or 91 percent of the country's
Gross Domestic Product (GDP), according to data published Friday.
The National Statistics Institute (INSEE) said that the latest figure could
be revised but it nonetheless illustrates the difficulty the new Socialist
government faces in bringing down debt at a time it needs to borrow to keep
the economy on an even keel.
With the economy stagnating and efforts underway to tackle deficits - with
signs of some success there - borrowing seems inevitable, even if lenders
accord extremely low rates to the French government in bond markets.
The debt-to-GDP ratio has risen 1.7 percent from the first to second
quarters this year and Prime Minister Jean-Marc Ayrault said as recently as
Thursday evening that interest payments on this debt are the biggest budget
item for his government, surpassing spending on health, education and defence.
About 1.4 trillion Euros in the overall debt amount has been negotiated
long-term and there is no immediate crisis, but the longer term trend is of
concern given the high interest reimbursements overall.
Under the temporarily-defunct rules of the Maastricht Treaty signed by
European Union members in 1992, debt should not go above 60 percent of GDP,
but the series of financial and economic crises since 2008 have given tacit
latitude to countries in this area. (End)
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KUNA 281059 Sep 12NNNN