By Ingrid Melander and Emmanuel Jarry
PARIS (Reuters) - France's new budget minister said on Wednesday he would stick to the spending cuts planned by his predecessor, whose sudden resignation in a tax fraud investigation threw an unwelcome spotlight on the country's fiscal dilemma.
Jerome Cahuzac, whose brief was to figure out how to rein in public spending further without extinguishing the stagnating economy's growth prospects, quit late on Tuesday over investigations he held a secret bank account in Switzerland. He has protested his innocence.
His successor, former Europe Minister Bernard Cazeneuve who took over on Wednesday, said he would stick to Cahuzac's fiscal program.
This means drafting a revised multi-year plan in time to put it to parliament by mid-April, with 5 billion euros more in savings for 2014 on top of a 60 billion-euro spending cut target set for the government's five-year term.
That in turn is key to the government's attempt to get a one-year reprieve on an EU target to bring its budget deficit below 3 percent of GDP. The European Commission has made structural reforms and staying close to the deficit target a condition for leniency.
The task will be difficult for a Socialist government and parliament uncomfortable with imposing further belt-tightening.
They are trying to boost growth - seen flat at best this year - and face an electorate already worn down by spending cuts and an unemployment rate standing at a 13-year high.
"I will assure policy continuity," Cazeneuve, a softly-spoken 49-year-old Socialist veteran who was one of Francois Hollande's spokesmen during his 2012 presidential campaign.
"There can be no growth without discipline in public accounts. There can be no growth if we do not rein in our deficits and debts, and the role of the budget minister is to channel these budgetary efforts towards growth."
Weaker-than-expected growth forced the government last month to abandon its pledge to cut the public deficit to an EU-imposed ceiling of 3 percent of economic output this year and to seek EU blessing to push the target back to 2014.
"There will be little or no downtime (for Cazeneuve)," Christian Eckert, lead lawmaker on the budget.
TOUGH ACT TO FOLLOW
Analysts said Cahuzac, known for resisting his colleagues spending demands, might be missed when it comes to implementing unpopular cuts, but they did not expect the 2-trillion euro economy - the euro zone's second biggest - to change its fiscal policy.
"There are strong enough commitments by the president, the prime minister and (Finance minister Pierre) Moscovici," said Gilles Moec, European economist at Deutsche Bank.
"I don't think we'll see any change of course. But the implementation of the reforms could be more difficult because Cahuzac was a heavyweight," Moec said.
As far as talks on the EU deficit target are concerned, the resignation should not change significantly as Moscovici is the European Commission's main interlocutor, an EU official said.
The yield on the French 10-year benchmark bond was largely unchanged after Cahuzac's resignation at a fraction above 2 percent.
(Additional reporting by Nick Vinocur and Elizabeth Pineau in Paris, Jan Strupczewski in Brussels; Editing by John Stonestreet)