PARIS -(Dow Jones)- France's public finances are in an "extremely serious" state, the head of the country's audit office said Sunday.
In an interview with the RTL radio station, Didier Migaud said the situation has deteriorated since last year, partly due to the economic downturn, but said this isn't the only reason. "We have a large structural deficit that's not linked to the crisis," he said. The situation requires "immediate," "sustained" and deep reforms, Migaud said, "but it can be righted."
At present, however, the deterioration is such that it can impair France's financial credibility and jeopardize the country's sovereignty and independence, he said. "When a country loses control of its indebtedness, you become increasingly dependent not only on the financial markets, but the financial institutions and individuals who lend the money."
The increase in France's debt load is reducing the government's margin of maneuver, he added. "We're not at the point of capsizing, but in order not to get to that point, we have to take a certain number of measures" to get back on a more even keel, he said. "There's no reason why France shouldn't continue to benefit from the confidence of its lenders," Migaud went on, so long as corrective action is taken.
Earlier this week, the French National Statistics office, Insee, reported that France's public debt climbed by EUR46.5 billion over the first quarter of this year, to EUR1.54 trillion.
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