The European Union has set a deficit target for its 28 members of 3 percent to ensure there is no repeat of the 2010 debt crisis which brought the euro zone to breaking-point. Last May 2013, France, whose 2012 deficit stood at 4.8 percent, negotiated a two-year extension with the EU to reach the 3 percent mark, agreeing a 3.9 percent target for 2013. Later on that year, it was forced to revise that figure higher to 4.1 percent.
All the while, growth forecasts were going in the opposite direction. The government which had originally banked on a 0.8 percent GDP number for 2013 had to cut it to 0.1 percent in April.
"Despite a considerable structural effort, which essentially results from a rise in taxations, the cyclical and structural deficits should therefore remain more elevated than the average of the other members of the euro zone and European Union," the report warned.
The Court highlights that the uncertainty over achieving the target is due to the combination of lower-than-expected revenues and faster-than-expected spending, caused in part by slow growth and stubbornly high unemployment.
"I don't think it's a surprise to anyone" Nicholas Spiro, managing director at Spiro Sovereign Strategy, told CNBC by telephone, adding that it put the "uncertainty about the French government's plans to cut public spending into sharper relief."
"There's been countless warnings from the Court of Auditors and other multinational bodies about the urgency of fiscal and structural economic reforms."
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In a push to kick-start the French economy, Hollande announced back in January that the government would implement labor reforms through a "Responsibility Pact" and endeavor to cut 50 billion euros ($68 billion) out of its spending by 2017.
Hollande's "rhetoric is admirable and the diagnosis is spot on", explains Spiro, but "it's all very foggy", especially as it will be "very difficult" for the President who is in a "very weak position politically and in an extremely weak position economically."
Taxes from both households and businesses, the Court report says, might not fill the country's coffers and it estimates that even though the government foresees a 3.0 percent rise in fiscal revenues, a 1.5 percent increase would be more likely.
Furthermore, it describes France's savings targets as "overestimated" and "notes the absence of any margin of security to face unforeseen expenditures."
"France is sinking in excessive debt, excessive regulations and excessive taxes" warns Spiro and this is "crunch time" for the Gallic economy. What it needs is fiscal and public finance reforms, and in order to lower payroll taxes, the government would need to "aggressively attack the public spending side."
(Read more: Hollande suffers further blow as French unemployment worsens)
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