PARIS, Feb 18: French Finance Minister Pierre Moscovici said on Monday he was sticking to the aim of cutting public deficit to three per cent of output this year but said the country’s credibility would not be hit if it failed to do so.

Moscovici’s comments came after revised figures by the national statistics agency showed that the economy shrank by 0.3 per cent in the fourth quarter of 2012 and growth was zero for the whole year. The latest data puts the government in a dilemma over a commitment to the EU to cut its public deficit to within the ceiling of 3.0 per cent of output this year as the eurozone, struggling as a whole with recession, fights its way out of the debt crisis.

“Our true commitment was to reduce our structural deficit by a huge margin,” Moscovici told reporters from the Anglo American Press Association.

The day I am speaking here I stick to the three per cent,” he said. I am waiting for the growth forecast... on Friday and then we will enter into a dialogue and we have got the tools for that,” Moscovici said.

“We must not add austerity to the risk of recession.” The zero growth in France in 2012, as reported by the national statistics agency INSEE on Thursday, is a sharp slowdown from growth of 1.7 per cent in 2011.  It scuttled France’s chances of meeting its target of reducing the public deficit to 4.5 per cent of gross domestic product in 2012, which was based on the economy growing by 0.3 per cent.

It also threw into question the 2013 target of reaching 3.0 per cent level that is the allowed ceiling for European countries.—AFP