This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.nytimes.com/2013/09/26/world/europe/new-french-budget-plan-includes-modest-cuts-and-tax-increases.html
The article has changed 4 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| New French Budget Plan Includes Modest Cuts and Tax Increases | New French Budget Plan Includes Modest Cuts and Tax Increases |
| (about 1 hour later) | |
| PARIS — Hoping to nurture the fragile beginnings of economic growth without running afoul of either the European Union or the financial markets, the French government presented a 2014 budget plan on Wednesday that included modest spending cuts and tax increases, but not the radical changes that many economists say the country needs. | |
| In line with the “fiscal pause” that President François Hollande promised, the budget would narrow the country’s deficit gradually and mainly through reductions in public spending, which makes up 57 percent of the country’s economy, well above the European Union average. Tax increases in 2014 would be smaller than in recent years, raising only about 3 billion euros ($4 billion) in new revenue, and would be felt mainly by businesses and wealthy individuals. | |
| The finance minister, Pierre Moscovici, promised that by 2015, all budget savings would come from reduced spending rather than tax increases. But by then the government also intends to have reached the 3 percent deficit level it has promised its European partners it will attain. France weathered the European crisis that dragged down Greece and Spain and “deserved to be trusted” by investors, he said. | |
| The budget would leave 13,000 government jobs unfilled as workers quit or retire, especially in the Ministries of Defense and Finance, and would trim about 6 billion euros ($8.1 billion) from spending on social programs and pensions, and 9 billion euros ($12.1 billion) in operational costs and investments. | |
| The government expects the French economy to grow by 0.1 percent this year and 0.9 percent in 2014. On that basis, it forecasts a deficit of 4.1 percent this year and 3.6 percent in 2014, in line with the country’s pledge to its European partners to reduce its deficit to 3 percent in 2015. France originally promised to reach that target by the end of this year, but it negotiated an extension because of the lengthy recession across Europe. The country’s public debt was expected to rise slightly in 2014, to 95 percent of gross domestic product. | The government expects the French economy to grow by 0.1 percent this year and 0.9 percent in 2014. On that basis, it forecasts a deficit of 4.1 percent this year and 3.6 percent in 2014, in line with the country’s pledge to its European partners to reduce its deficit to 3 percent in 2015. France originally promised to reach that target by the end of this year, but it negotiated an extension because of the lengthy recession across Europe. The country’s public debt was expected to rise slightly in 2014, to 95 percent of gross domestic product. |
| Mr. Hollande declared in July that “the recovery, it’s here,” and promised that unemployment, now about 11 percent generally and nearly 25 percent for young people, would soon fall. A Socialist who won election in 2012 after campaigning against the austerity policies that had been imposed on Europe’s ailing economies, Mr. Hollande has seen his popularity fall sharply since he took office. | Mr. Hollande declared in July that “the recovery, it’s here,” and promised that unemployment, now about 11 percent generally and nearly 25 percent for young people, would soon fall. A Socialist who won election in 2012 after campaigning against the austerity policies that had been imposed on Europe’s ailing economies, Mr. Hollande has seen his popularity fall sharply since he took office. |
| Mr. Hollande has pledged to stem the rise of unemployment by the end of the year, and statistics released on Thursday by the Labor Ministry suggested that goal might be near. The number of unemployed workers registered with the national employment agency, Pôle Emploi, fell by 50,000 in August, the first such decrease since April 2011. But much of that fall may be attributable to people who have removed themselves from the agency’s rolls after failing to find work, analysts noted, and not to job creation. | |
| The government, too — however much it has been at pains to find and trumpet good news wherever it can — was circumspect. In a statement sent to reporters, Labor Minister Michel Sapin called for “prudence” in interpreting the numbers, however “encouraging” they might seem. | |
| “A drop in August does not allow us to exclude an increase the next month,” Mr. Sapin said. “The results of one month do not constitute a reversal.” | |
| Mr. Hollande’s economic policies have been in keeping with his reputation as a deft if uninspiring builder of consensus, including a plan to overhaul the country’s troubled pension system that went too far for the country’s unions but not far enough to satisfy economists. |