French Prime Minister Dominique de Villepin proposed Wednesday the budget for year 2006 aiming at deficit cutting and spending limit.

The 266.1-billion-euro (319.3-billion-dollar) budget targets a deficit of 46.8 billion euros, or 2.9 percent of GDP, based on economic growth of between 2 percent and 2.5 percent, compared with 2005 growth of 1.5 percent, said Finance Minister Thierry Breton in an interview with French newspaper Le Monde in its Wednesday edition.

The ratio of overall debt to GDP will rise to 66.0 percent from 65.8 percent this year, the fourth consecutive year that France's debt-to-GDP ratio stands above the 60 percent level called for in the European stability and growth pact for the euro area.

The spending plan also assumes a euro-dollar exchange rate of 1. 23, compared with 1.26 this year, and an average price of a barrel of crude oil of 60 dollars compared with 55.20 dollars in 2005.

The budget includes 800 million euros of new tax cuts, including 500 million euros (600 million dollars) to increase a rebate for low-income earners.

According to Breton, income tax collections in 2006 will almost equal the cost of paying interest on its national debt.

Source: Xinhua