During a broad-ranging interview on French radio, he said he expected growth of 1.7 to 2.0 per cent next year -- after what is expected to be at the very most 0.5 per cent in 2003.

"Growth is back and every household will feel the impact in 2003," he told Europe 1 radio.

The prime minister was keen to drum up confidence in a country where voters are wary of government economic policy because the unemployment rate is still rising and is not to far from 10 per cent at the moment.

On the eve of a crunch meeting of EU finance ministers in Brussels, Raffarin was also asked what he would do to respect the EU Stability and Growth Pact, with France's public sector deficit in breach of the pact's upper limit on deficits.

He gave nothing away on a recent promise by Finance Minister Francis Mer that extra steps would be taken after demands by the European Commission that France reduce its underlying structural deficit by 1.0 per cent in 2004.

"On the deficit, we have done the necessary," Raffarin said, highlighting that public spending was to rise by no more than the amount mechanically implied by inflation in 2004 and that the current deficit problems were due to tax collection shortfalls as a result of the recent economic downturn.

He did not say explicitly whether France was not willing to make any further concessions.

Raffarin said it was now up to Mer to convince other finance ministers on the legitimacy of France's deficit strategy at talks in Brussels on Monday and Tuesday.

As for the pact's upper limit, which France will have breached for the third year running in 2004, Raffarin said:

"We will reach the goal of less than three per cent in 2005."

Some contend that France would have less problem keeping its deficit within EU bounds if it was not trying at the same time to deliver on President Jacques Chirac's promise that income tax would be cut by one-third between 2002 and 2007.

Mer has said France will take extra steps in response to demands from the European Commission -- which polices adherence to the European Union Stability and Growth Pact -- that Paris cut France's structural deficit by 1.0 percentage point in 2004.

But Paris previously said fully meeting the Commission's demand for a 1-per cent cut implied spending cuts or other savings worth some 6 billion euros and that this was simply too much to expect.

France and Germany, the euro zone's two largest economies, are set to bust the 3 per cent of gross domestic product deficit ceiling in 2004 for the third year in succession.

EU President Italy said on Friday a compromise proposal would be put forward to defuse the blazing dispute over the two countries' excessive budget deficits.