France unveils major tax cuts as growth flags

Tuesday, 25 September 2018 00:00 - - {{hitsCtrl.values.hits}}

PARIS, AFP: The French Government on Monday unveiled billions of euros in tax relief for businesses alongside further budget cuts, as President Emmanuel Macron struggles to deliver more jobs and higher growth as promised.

The former investment banker’s poll ratings have dived in recent weeks as growth has slowed despite a series of reforms presented as unavoidable shock treatment for getting France on solid financial footing.

Critics say most people have been left behind by Macron’s policies so far, which have seen him raise taxes on retirees while cutting a wealth tax on top earners.

Pensions and welfare benefits will be shaved further in the 2019 budget. Macron complained in June that France spends “a crazy amount of dough” on social programs.

And 4,100 more public sector jobs will be axed as Macron aims for a deficit of 2.8% of GDP, below the 3% limit set for EU members.

Higher taxes on fuel and cigarettes will also hit consumers next year.

But, the Government says the pillar of the 2019 budget will be a combined EUR 20 billion ($ 23.5 billion) of tax cuts for businesses and EUR 6 billion in tax relief for households, including a gradual end to an annual housing tax.

“The long-term goal is to build a new French prosperity that will benefit all French people in all regions,” Finance Minister Bruno Le Maire said as he presented the budget in Paris.

But, he acknowledged that results from Macron’s reform drive so far “are unsatisfactory compared with our European neighbours, and we certainly don’t intend to stop here”.

“We’re doing less well than our European partners on unemployment, growth, the deficit and debt,” Le Maire said.

Patience is wearing thin for many as unemployment has barely budged since Macron’s election in May 2017, standing at 9.1%.