Saturday

3rd Dec 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.

Analysis

Doubts hang over EU investment plan's future

Questions of value for money and a lack of transparency complicate adding almost €200 billion more and extending the Juncker investment plan to 2020.

News in Brief

  1. Talks on wholesale roaming rules to start
  2. Lead MEP Dieselgate committee: Italy and Slovakia will cooperate
  3. Transparency NGO sues EU commission on Turkey deal
  4. Pro-EU liberal wins UK by-election
  5. Finnish support for Nato drops, Russia-scepticism grows
  6. Cyprus talks to resume in January
  7. Documents from German NSA inquiry released
  8. Transport commissioner 'not aware' of legal action on emissions

Stakeholders' Highlights

  1. CESIElects Leaders and Sets Safety & Health at Work and Gender Equality Among the Guidelines For Next Term
  2. European Gaming & Betting AssociationContinues to Grow its Membership and Welcomes its Newest Member Association
  3. ACCASupports the Women of Europe Awards, Celebrating the Women who are Building Europe
  4. European Heart NetworkWhat About our Kids? Protect Children From Unhealthy Food and Drink Marketing
  5. ECR GroupRestoring Trust and Confidence in the European Parliament
  6. UNICEFChild Rights Agencies Call on EU to put Refugee and Migrant Children First
  7. MIRAIA New Vision on Clean Tech: Balancing Energy Efficiency, Climate Change and Costs
  8. World VisionChildren Cannot Wait! 7 Priority Actions to Protect all Refugee and Migrant Children
  9. ANCI LazioRegio-Mob Project Delivers Analysis of Trasport and Mobility in Rome
  10. SDG Watch EuropeCivil Society Disappointed by the Commission's Plans for Sustainable Development Goals
  11. PLATO15 Fully-Funded PhD Positions Open – The Post-Crisis Legitimacy of the EU (PLATO)
  12. Access NowTell the EU Council: Protect our Rights to Privacy and Security