France will use reserve fund to keep deficit pledge - minister

PARIS (Reuters) - France will use a seven-billion-euro "precautionary" reserve fund to ensure it hits its target of narrowing its public deficit to within targets agreed with the European Union, Finance Minister Pierre Moscovici said. France is due to reveal its 2013 deficit figure on March 31 and is targeting a deficit of 3.6 percent of output in 2014 before cutting it to 2.8 percent, just under the three-percent threshold agreed with the EU, in 2015. However the European Commission said last week it estimated France would miss that target without extra efforts and put it under increased monitoring. "We have an ability to act, a precautionary reserve fund that we have indeed mobilised," Moscovici told BFM TV late on Sunday. Asked if the amount of the fund would suffice to maintain the targets, he added: "Easily, easily." The precautionary reserve is a sort of "rainy day" fund that is part of annual state budgets - a portion of their credits that ministries set aside in an endeavour to guarantee that the overall budget is respected. The Cour des Comptes state audit body has forecast a shortfall of up to six billion euros in revenues in 2014. On Sunday parliament speaker Claude Bartolone, a Socialist Party ally of President Francois Hollande, told French TV that France could take a "little bit longer" than expected to bring its deficit under three percent. (Reporting by Jean-Baptiste Vey and Sophie Vey; writing by Mark John; editing by Brian Love)