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| French government offers €20bn tax boost for businesses | French government offers €20bn tax boost for businesses |
| (9 days later) | |
| France's president, François Hollande, sought to shrug off his business-bashing reputation on Tuesday with a €20bn-a-year (£16bn) package of tax credits and other pro-industry measures. | France's president, François Hollande, sought to shrug off his business-bashing reputation on Tuesday with a €20bn-a-year (£16bn) package of tax credits and other pro-industry measures. |
| The prime minister, Jean-Marc Ayrault, surprised many by announcing that the government would accept much of the recommendations of a report by Louis Gallois, the former EADS boss, on making the French economy more competitive. | The prime minister, Jean-Marc Ayrault, surprised many by announcing that the government would accept much of the recommendations of a report by Louis Gallois, the former EADS boss, on making the French economy more competitive. |
| "France is not condemned to the spiral of decline. But we need a jolt at a national level to regain control of our destiny," Ayrault said. "This is about giving our companies room to manoeuvre." | "France is not condemned to the spiral of decline. But we need a jolt at a national level to regain control of our destiny," Ayrault said. "This is about giving our companies room to manoeuvre." |
| Firms will be offered tax credits worth up to €10bn next year, rising to €20bn by 2015, to be financed by an increase in VAT and €10bn in public spending cuts, as yet unspecified. That was less than the €30bn-a-year cut in payroll taxes that Gallois demanded, but far more than many analysts expected. The rebates will be proportionate to the size of a company's payroll, up to a maximum of two-and-a-half times the minimum wage, in an attempt to support jobs. | Firms will be offered tax credits worth up to €10bn next year, rising to €20bn by 2015, to be financed by an increase in VAT and €10bn in public spending cuts, as yet unspecified. That was less than the €30bn-a-year cut in payroll taxes that Gallois demanded, but far more than many analysts expected. The rebates will be proportionate to the size of a company's payroll, up to a maximum of two-and-a-half times the minimum wage, in an attempt to support jobs. |
| Amid rising concern about France's global competitiveness, Hollande is keen to show that despite implementing a 75% top rate of income tax on the super-rich, he is on the side of business. Fabrice Montagne, of Barclays, said the announcement would "improve sentiment vis-a-vis the government's economic policy, which will be welcomed by the president as approval rates are at significantly low levels". | Amid rising concern about France's global competitiveness, Hollande is keen to show that despite implementing a 75% top rate of income tax on the super-rich, he is on the side of business. Fabrice Montagne, of Barclays, said the announcement would "improve sentiment vis-a-vis the government's economic policy, which will be welcomed by the president as approval rates are at significantly low levels". |
| The International Monetary Fund said in its annual report on the French economy, published on Monday, that without radical reform France could slip behind Spain and Italy, which have been hobbled by lack of competitiveness against the mighty German economy. | The International Monetary Fund said in its annual report on the French economy, published on Monday, that without radical reform France could slip behind Spain and Italy, which have been hobbled by lack of competitiveness against the mighty German economy. |
| The government's proposals, which will have to be passed by parliament before it can be implemented, also include support for training and small business, and investment in innovation. | The government's proposals, which will have to be passed by parliament before it can be implemented, also include support for training and small business, and investment in innovation. |
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