PARIS - France's Socialist president-elect Francois Hollande may use a summer audit of state finances to water down his generous campaign promises rather than risk a backlash from financial markets against stubbornly high deficits and rising debt.
Advisers say he could even freeze some spending if the review turns up any nasty surprises, soothing investors who are worried he has become the figurehead for a fight against German-imposed austerity in the euro zone.
Hollande, due to take office next week after toppling President Nicolas Sarkozy in Sunday's election, dismayed analysts with his campaign spending promises, such as hiring 60,000 school staff and creating 150,000 state-aided jobs.
France already has one of the highest levels of public spending in Western Europe, at around 55 percent of GDP, and has not balanced its budget since 1974.
But Hollande, a 57-year-old graduate of France's elite ENA civil service school, together with other Socialist leaders has already been discretely preparing the ground to play a more cautious game.
"There are certainly deficits, things hidden in the shadows," Jean-Marc Ayrault, the Socialists' parliamentary leader and a candidate for prime minister, said of the audit.
"We will discover the reality and strike a balance between fostering growth and making the necessary efforts to reduce the debt."
Those close to Hollande are now urging him to use the review by the country's top audit body, the Cour des comptes, as a justification for lowering his growth forecasts for the euro zone's No.2 economy, widely seen as too optimistic.
Advisors are pressing him to pare back spending in certain areas, particularly the deficit-ridden social security system, and to raise taxes by eliminating widespread exemptions and raising the CSG welfare charge on income and capital revenues.
"There are holes in the programme on the spending side and we will be obliged to take action," said one long-standing advisor, who asked not to be identified.
WINDOW OF OPPORTUNITY
The situation is delicate for Hollande after he promised change to voters tired of unemployment running at 12-year high of nearly 10 percent and talk of spending cuts.
Sarkozy, despite his tough rhetoric, took only tentative steps to putting France's finances on an even keel and the country was stripped of its prized triple-A credit rating by Standard & Poor's on his watch.
In a strongly-worded report in February likely to presage its summer findings, the court, a quasi-judicial body, said at the current pace it would take 10 years to eliminate the deficit, which ended last year at 5.2 percent of gross domestic product. It said public debt was approaching a "danger zone" of 90 percent of GDP.
With markets edgy, the Socialists will have to be careful how they manage the Court's report. In February, Spain's new conservative government sent shockwaves through euro zone markets after it uncovered a worse-than-expected deficit of 8.5 percent of GDP from its Socialist predecessor.
"It will certainly not be on that scale but the Court of Audit always finds some bad surprises," Jerome Cahuzac, the Socialist head of the National Assembly finance committee and a possible candidate for budget minister, told Reuters.
Aware of the political risk of angering left-wing voters, Hollande's advisors say he must act within two months of taking office on May 15, allowing the Socialists to point the finger at Sarkozy's outgoing government.
Any announcement would likely be after June 10 and 17 parliamentary elections, essential for Hollande to gain a working majority for legislation.
"We have a window of opportunity, but it has to be done quickly," said a second Hollande advisor.