PARIS--France's newly reshuffled government introduced an additional EUR4 billion ($5.52 billion) in cost savings Wednesday aimed at narrowing the euro zone's second biggest economy's budget deficit to levels required by the European Union.

The new belt-tightening is part of Paris' effort to rein in its finances after missing its deficit forecast last year. The finance ministry said the extra EUR4 billion in savings--combined with a three-year EUR50 billion savings plan the government had previously announced--was necessary to prevent Paris from running afoul of Brussels and shedding credibility among other EU countries.

"Our voice counts in Europe, and if we want to continue counting we obviously need to be irreproachable in terms of our commitments," Finance Minister Michel Sapin said.

The new cuts expose the delicate balancing act for President François Hollande as he seeks to fix France's public finances while seeking to rekindle modest economic growth. The surge of fiscal discipline is also sowing discord among the political ranks of President François Hollande's Socialist Party.

Mr. Hollande has pledged billions in payroll tax cuts for French companies and minimum wage earners in a bid to reignite France's economy, which Mr. Sapin said he expects to grow by 1% this year.

To finance those tax cuts, however, he is freezing welfare benefits and pension payments--moves regarded as controversial within his Socialist Party. Some lawmakers in his party have demanded the government scrap the plan, raising questions about whether the measures will be backed by a strong majority when they are put to a vote in parliament next Tuesday.

In an unusual display of public discontent with a French president, crowds gathered in the southern French town of Carmaux booed Mr. Hollande as he walked down the street. One woman, who identified herself as 51-years-old and jobless, approached the leader and chastised him in front of TV cameras.

"I believed in you!" she yelled. "Unemployment, we're fighting it," Mr. Hollande responded. "I'm disappointed," she added.

In addition to the austerity measures, France tweaked its deficit targets for this year and 2015, forecasting a 2014 deficit of 3.8% of economic output compared with the previous 3.6% target. Next year, the finance ministry forecasts a deficit of 3%--right at the limit of EU rules--rather than the 2.8% previously forecast.

The Finance Ministry said it expects public debt to decrease in 2016, reversing a yearslong climb to 95.6% of gross domestic product.

Mr. Sapin said the government's austerity package is designed to deliver a "shock of confidence" to France's anemic economy, which is saddled with double-digit unemployment and labor costs that have discouraged firms from hiring.

"When you slow or even stop the increase in spending there are heavy consequences," Mr. Sapin said. "Fifty billion is tough."

Write to Stacy Meichtry at stacy.meichtry@wsj.com

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