PARIS -- French Prime Minister Jean-Pierre Raffarin on Thursday pledged that his government would cut taxes in 2004, but said he still stands by the European Union's budget rules despite the country's strained fiscal situation.

Speaking in a joint interview with television station France 3 and France Info Radio, Raffarin also promised not to hike France's Universal Social Contributions (CSG) in 2003.

"We will cut taxes in 2004," said Raffarin.

Raffarin also handed out a thinly veiled reproach to French Finance Minister Francis Mer, who last week commented that tax cuts would not necessarily translate into an increase in consumer spending.

"There is a prime minister, he is assuming the responsibility, and he is lowering taxes in 2004, I say this now one time for all.

Raffarin's comments came a day after the European Union launched the first step in its excessive-deficit procedure against France, with the country's bloated budget deficit breaching the limit allowed under the EU's stability and growth pact, which oversees budgets in the euro zone. But Raffarin added: "I will in no way question the stability and growth pact. It is the rule for having the euro and thus it is important."

He blamed the previous socialist government for not undertaking the necessary reforms while economic growth was riding high in 2000. "It is for this reason that I have asked for a little time," he said.

"We are agreed with the European Commission that it is necessary to make the reforms and master our spending," he said. Raffarin added that the country's fiscal obligations would be observed "not just because they are commitments, but because it is good for France." The prime minister said that he wants to reduce public spending growth to zero to reduce the deficit of the French public accounts. (AFP)