Wednesday

25th May 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.

News in Brief

  1. France oil strike hits petrol pumps
  2. Turkey MPs could block EU deal over visas
  3. EU Commission approves giant beer merger
  4. Technical witness tells EP diesel cheating not necessary
  5. Poland presents 'solutions' to constitutional crisis
  6. Greek bailout without IMF not an option, says Dijsselbloem
  7. Germany's Bayer makes offer to buy US giant Monsanto
  8. Greece evacuates Idomeni migrant camp

Stakeholders' Highlights

  1. Swedish EnterprisesNew rules for posted workers - Better Protection or the End of Posting ?
  2. Innovators Under 35Meet MIT Technology Review's Innovators Under 35 Award Recipients from Belgium on 25 May, 6pm
  3. Open EuropeJoin the Brussels Brexit Debate on Wednesday, 25 May at 5:00 PM
  4. World VisionWhy The EU Needs to Put Children at the Centre of Emergencies - In Their Words
  5. ACCASustainability Reporting in Danger of Losing Its Momentum Says ACCA and CDSB
  6. CEDEC - Covenant of MayorsWebinar on 25 May - Electric Vehicles Development: The Role of Local Entities
  7. Dialogue PlatformDiversity as Heritage of Humanity! Join the “Colors of the World“ Show at the EP
  8. Centre Maurits CoppietersNew Responses to the Basque Peace Process? MEP Juaristi on Stateless Challenges Conference
  9. European Healthy Lifestyle AllianceImproving Cardiovascular Health Begins by Closing the Gap in Sex Disparities
  10. IPHRBrussels Talks to Take Stock of Human Rights in Turkmenistan
  11. World VisionCash-based Programming to Address Hunger in South Sudan:
  12. Belgrade Security ForumOpen Call for Applications! Join the Events Team at the 6th Belgrade Security Forum.

Latest News

  1. EU and IMF agree debt relief for Greece
  2. Austria vote is wake-up call for EU left
  3. Poland vows solution to judicial crisis
  4. Terrorists likely stockpiling explosives in EU, says Europol
  5. EU navies to help Libya coastguard stop migrants
  6. Merkel casts doubt on Turkey visa-free travel
  7. EU and Poland in last minute talks on rule of law
  8. Tough challenges ahead for Austria's president