(PARIS) - The French public deficit will remain stable at 2.7 percent of GDP for this year and the next and will not be wiped out by 2012 as France had promised the European Union, the government said Friday.

As a member of the eurozone single-currency bloc, France had given an engagement to reduce its public deficit -- the shortfall on the central budget plus social security and local government spending -- to zero by 2012.

Instead, the 2009 budget proposal presented to parliament on Friday by the finance ministry predicted the deficit as a percentage of Gross Domestic Product (GDP) would fall to two percent in 2010, 1.2 percent in 2011 and 0.5 percent in 2012.

The deficit figures were unveiled along with a raft of bad economic news, including that the economy had shrunk by 0.3 percent in the third quarter of 2008 and that annual growth would lie between one and 1.5 percent.

The budget was drawn up on the basis that inflation would fall from 2.8 percent in 2008 to 2.0 percent next year, that oil will trade at 100 dollars per barrel and the euro be worth 1.45 dollars.

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