Tuesday

27th Sep 2016

Hollande announces budget cuts, tax breaks

French President Francois Hollande on Tuesday (14 January) pledged to cut €50 billion in government spending over the next four years and give French firms tax breaks in order to jumpstart the eurozone's second-largest economy.

In an almost three-hour long press conference, Hollande promised to slash €30 billion in tax obligations for French firms, by giving them an exemption from family welfare obligations.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

  • France wants to catch up with Germany in economic power (Photo: elysee.fr)

"We must do everything for employment. This is my priority," Hollande said, adding that his goal was to achieve "social and economic convergence with Germany."

Unemployment in France has surpassed ten percent, while the economy struggles to regain power - contracting by 0.1 percent in the third quarter of 2013.

Last year, France got a two-year extension from the EU commission to bring down its deficit to three percent of GDP from over four percent as it currently stands.

But in return it has to implement reforms.

With public spending at the second-highest rate in Europe (57% of GDP), Hollande's fiscal policies had to touch on this sector, even if he is a Socialist politician.

Hollande called his fiscal proposals a "responsibility pact" that will also require companies to hire more people in return for the tax breaks.

A new committee will be established to monitor employment under this pact, he said.

On EU economic governance, where Hollande and German Chancellor Angela Merkel are at odds over the necessity to bring about a treaty change, the French President said he wants a "proper government" for the Eurozone.

"We need to make progress towards an economic and monetary union, with a Eurozone which can have a proper government with growth and employment as objectives. It should also have a fiscal capacity which could help us in our actions. This would be a government for the Eurozone," he said.

He did not specify if he changed his mind on treaty change, however.

Hollande's personal life was also touched upon during the press conference, as he did not deny having had an affair with an actress and promised to clarify the situation with his partner, Valerie Trierweiler, before a US trip next month.

Investigation

Diesel cars still dirty, despite huge EU loans

The European Investment Bank lent billions to carmakers, in part to clean up diesel cars. But diesel cars are still dirty, prompting questions if the money was well spent.

EU redoubles attack on roaming charges

After an embarrassing U-turn last week, the EU commission has proposed to abolish roaming charges by June next year. Only "abusive" clients to pay.

Stakeholders' Highlights

  1. EFAMessages of Hope From the Basque Country and Galicia
  2. Access NowDigital Rights Heroes and Villains. See Who Protects Your Rights, Who Wants to Take Them Away
  3. Martens CentreQuo Vadis Georgia? What to Expect From the Parliamentary Elections. Debate on 29 September
  4. EJCAppalled by Recommendation to Remove Hamas From EU Terrorism Watch List
  5. GoogleBringing Education to Refugees in Lebanon With the Clooney Foundation for Justice
  6. HuaweiAn Industry-leading ICT Solution Provider and Building a Better World
  7. World VisionUN Refugees Meeting a Wasted Opportunity to Improve the Lives of Millions of Children
  8. Belgrade Security ForumCan Democracy Survive Global Disorder?
  9. YouthProAktivEntrepreneurship, Proactivity, Innovation - Turn Ideas Into Action #IPS2016
  10. GoogleTrimming the Waste-Line: Weaving Circular Economy Principles Into Our Operations
  11. Crowdsourcing Week EuropeDon't Miss the Mega Conference to Master Crowdsourcing, Crowdfunding and Innovation! 10% Discount Code CSWEU16
  12. ACCAKaras Report on Access to Finance for SMEs in a Capital Markets Union