Centre-right government in France expects to cut the deficit by nearly Euro 10 billion in 2012. As per reports of Le Journal du Dimanche, the government is under pressure from IMF and market to cut the shortfall in funds and the plans for reducing the defict will be shared on 24 August.

President Nicolas Sarkozy aims to keep the cuts less painful as the country faced elections in coming April. The budget cuts might mean less government spending and roll back of tax exemptions on housing.

Sarkozy wants to avoid any broad base tax rise as that would mean troubles on election front. The first quarter registered decent jump for French economy, but the coming quarters look difficult on the margins front. The investor confidence seems lower as well.

After the downgrade of US debt, France might face downgrade from S&P. There were rumors that French banks were facing trouble as well.

France aims to cut down the budget deficit to 5.7% of GDP during 2012 and even lower for year 2013 at 3%.