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Thursday September 26, 2013 MYT 4:40:02 PM
Thursday September 26, 2013 MYT 4:41:17 PM
French Minister of Social Affairs and Health Marisol Touraine attends an interview at the ministry in Paris, September 2, 2013. REUTERS/Philippe Wojazer
PARIS (Reuters) - France's social security deficit is falling faster than auditors expected this year as the economy gathers steam and is set to decline further next year, the social affairs minister said in a newspaper interview on Thursday.
Though the deficit of the health, pension and family benefit system is on course to decline by more than some estimates, it will nevertheless overshoot the target set in the 2013 budget.
The state Court of Auditors warned last week that the slowing pace of decline since the social security deficit peaked in 2010 risked causing a "dangerous spiral" of debt.
The shortfall accounts for nearly 20 percent of the overall public-sector deficit, which the government expects to stand at 3.6 percent of economic output next year according to the 2014 budget bill unveiled on Wednesday.
"The slight economic pick-up in the second half of the year leads us to expect the (social security) deficit to be lower than in 2013," Social Affairs Minister Marisol Touraine told Les Echos business daily.
The euro zone's second-biggest economy is slowly regaining momentum after a short, shallow recession at the start of the year, offering the government some relief as it struggles to cut the deficit to an EU-target of 3 percent of output by 2015.
Boosted by the improving economy, the social security deficit will likely stand at 16.1 billion euros (13.5 billion pounds) this year, down from 17.4 billion euros last year, Touraine said.
In June, the official body that monitors the social security accounts estimated that the deficit would fall to 17.1 billion euros while the state audit office has forecast a slightly bigger shortfall.
Despite the improvement, the deficit will be larger than the 14.3 billion euros targeted in the 2013 budget.
Touraine said the deficit was expected to fall even more sharply next year to about 13 billion euros as the government squeezes social spending.
The Socialist government is counting on wringing 6 billion euros in savings in 2014 from overall social spending, which includes unemployment benefits and some pension payments not covered in the general social accounts.
It is targeting 2.4 billion euros in savings on healthcare, coming mainly from drug and hospital costs, Touraine said. ($1 = 0.7403 euros)
(Reporting by Leigh Thomas; Editing by Paul Taylor)
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