A French flag covers a plaque before its unveiling during the inauguration of a Gendarmerie in La Londe-les-Maures, Southern France, May 19, 2011. REUTERS/Philippe Wojazer (FRANCE - Tags: POLITICS)

France's new Socialist government will push ahead with plans to lower the pension age for people deemed to have worked long enough, Finance Minister Pierre Moscovici said on Thursday, defying an EU warning on the cost of the retirement system.

As the number of job seekers in France hit its highest this century, the European Union's executive arm said on Wednesday that budget plans inherited from the previous government were not tight enough for France to meet next year's fiscal target.

In its annual assessment of French public finances, the European Commission said the financing of the pension system had to be closely monitored despite savings that should come from a 2010 reform by conservative former President Nicolas Sarkozy.

President Francois Hollande, who took office this month, plans to partially roll back that reform, which raised the retirement age by two years. His main aim is to reestablish the right to retire at 60 on a full pension for people who started work as young as 18.

“It will be done and it will be done in the coming weeks,” Moscovici said on France Inter radio.

Hollande is under pressure from rising unemployment as the euro debt crisis adds to pressures on the economy.

The number of French jobseekers rose in April for the twelfth month running to 2.89 million, up 0.1 percent from March and the highest since September 1999. The labour ministry said it was braced for more layoffs in the months ahead.

Hollande's partial rollback of pension reforms is expected to cost 5 billion euros ($6.2 billion) annually by the time it is fully phased in over five years and is to be financed by an increase in workers' pension contributions.

In addition to the initial changes, Hollande's government wants over time a broader overhaul of the retirement system and its financing, with talks due to start in the coming months with trade unions and employers.

Hollande's government has pledged to stick to the previous government's commitment to cut the public deficit to an EU-imposed limit of 3 percent of gross domestic product next year from an estimated 4.2 percent this year.

Warning that the target would be missed without additional measures, the Commission said the French government needed to detail additional measures, especially for reining in spending.

“The European Commission's recommendations on deficits are an assessment of past policies and are not a criticism on measures to come in the future,” European Affairs Minister Bernard Cazeneuve told LCI television.

The government has ordered an in-depth audit of public finances, which Moscovici said the national audit office would deliver between June 20 and July 1, shortly after the two-round parliamentary election on June 10 and 17.

On the basis of what the audit turns up, the government is then due to prepare a bill in July adjusting the 2012 budget to ensure that deficit targets are respected. - Reuters