French PM Fillon tells farmers 'France is broke'

By Henry Samuel in Paris

France is bankrupt and can no longer afford to pay its workers generous salaries and subsidies, its prime minister has declared.

Francois Fillon made the undiplomatic outburst during a trip to the French island of Corsica, where farmers were demanding more government money.

"I am at the head of a state that is in a position of bankruptcy," he said.

"I am at the head of a state that for 15 years has been in chronic deficit. I am at the head of a state that has not once passed a balanced budget in 25 years. This can't go on."

Mr Fillon's government is due to announce the 2008 budget this week with a deficit of €41.5billion (£29billion).

But his remarks drew immediate fire, both from within his own ranks and from the opposition.

Francois Bayrou, the head of the centrist Modem party, said Mr Fillon seemed to forget that both he and Nicolas Sarkozy, who was finance minister before becoming president, had been in government since 2002 without improving the situation.

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He added that Mr Sarkozy's decision to spend up to €15billion (£10.5billion) on a package of tax cuts had only made things worse. One deputy from Mr Fillon's UMP party added: "This phrase was badly timed. The French are liable to ask why we committed all this spending on the fiscal package if we are in such a bad way."

It is the second time in two weeks that Mr Fillon has run into trouble over his tough-talking rhetoric.

The first came when he announced that he only needed "the word" from Mr Sarkozy to roll out a plan to enact state pension reforms, even before trade unions had begun negotiations. They called a strike for Oct 18.

This gaffe reportedly enraged Mr Sarkozy, who spent days reassuring the unions that they would be consulted.

There were rumours that Mr Fillon would be replaced in a reshuffle in the New Year. However, in an interview last week, the president showered his prime minister with praise, even describing the two men's views as "interchangeable".

Some observers say Mr Fillon has decided to speak out because he is tired of being stifled by the "hyper-president" and his media-friendly aides at the Elysee, and is keen to push ahead with reforms.

One colleague from the Sarthe region, where Mr Fillon is a deputy, said: "Fillon has immense pride. While Sarkozy continues to stifle him and wants to do everything, Fillon will try and give provocative speeches in order to exist. It's a process that could get out of control."

Others argue that his "spontaneous" outbursts are part of a co-ordinated double act, with Mr Fillon playing the tough guy and Mr Sarkozy the conciliator.

Either way, Le Monde praised Mr Fillon's "language of truth" in its editorial, adding that, given the parlous state of France's debt and deficit, he "had good cause for concern."

Quoted from http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/09/24/wfra124.xml:

French PM Fillon tells farmers 'France is broke' - Telegraph

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