French govt agencies set to be closed or merged

Tens of thousands of French government agency workers could lose their jobs in a new round of cost-cutting aimed at balancing the country's books.

Amelie de Montchalin, minister delegate for the budget and public accounts in Prime Minister Francois Bayrou's government, said on the weekend she is looking at either combining or eliminating around a third of all such agencies.

She told the French broadcasters CNews and Europe 1 on Sunday the government hopes to save between 2 billion and 3 billion euros ($2.3 billion to $3.4 billion) by making the move.

"The state … is going to clean up our organization, because the French people are asking for it," she said. "We will, by the end of the year, propose in the budget that a third of state-backed agencies and operators that are not universities are merged or eliminated."

She made the comment after Bayrou's government said it needs to cut the public-sector budget deficit, from today's 5.8 percent of economic output to 3 percent, which is the European Union's mandated maximum, by 2029.

De Montchalin said France has around 1,200 agencies and operators carrying out work on behalf of the state that could be rationalized. They carry out functions autonomously, under the supervision of government ministries.

The Inspectorate General of Finance said recently that the agencies provide important services but are frequently too expensive because of "overstaffing" and "opaque" management styles and operating structures.

France's Foundation for Research on Public Administrations and Policies, or iFRAP, a liberal think tank, has frequently criticized the agencies and complained they duplicate work.

De Montchalin's announcement came after France's Finance Minister Eric Lombard said the country needs to cut 50 billion euros of spending this year, and 40 billion euros in 2026.

De Montchalin has not given details about when and how people could end up losing their jobs, but said: "There will be operating savings. We will bring the teams closer together, so effectively, there will be fewer public jobs."

She said the agencies employ around 180,000 people.

"That is to say more than the number of police officers," she said. "You have people who are retiring, you have people you can bring together, we have plenty of resources without doing social damage. The money we manage is that of the French people. We have a duty of rigor, we have to be accountable, and therefore do all this work of efficient organization by removing what is useless or what costs too much."

She said the government will "reduce our complexity" and "put a stronger, more effective state back on the ground".

The minister added that more details will be unveiled by the middle of next month.