President Nicolas Sarkozy's government on Wednesday unveils its first budget since taking office, with state spending under scrutiny after the prime minister warned that France was bankrupt.
Prime Minister Francois Fillon caused a stir last week when he said the nation was "in a situation of bankruptcy" after decades of accumulated budget deficits and called for a change in mindset.
....Despite the dire state of public finances, Sarkozy dismissed suggestion that the nation was headed toward a belt-tightening austerity plan and said economic growth was key to filling state coffers again.
"I have committed myself to getting public finances under control in France and I will do it," Sarkozy said in New York on Tuesday where he attended a session of the UN General Assembly.
There will be no austerity plan," he added. "France's economic problem is very simple: we have discouraged hard work and we must encourage it (...) to gain growth."