France to cut 10 billion in tax breaks
With France facing a budget deficit and aiming to make cuts in spending while increasing revenue for the government (and implementing reforms such as the controversial retirement age raise…), it’s no surprise that the government has made this move. For economic background, here’s a brilliant guide from the Economist on Europe’s debt crisis.
For now it seems like France is taking the right actions for now, as its debt ratings from Moody’s remain in good condition. But there have been concerns and warnings that France could face long-term debt problems and thus a credit down-rating (thus undermining their ability to finance the state debt through treasury bonds). Thus it’s important that France continues to reform its system (such as raising the retirement age from 60, the lowest in Europe).
This is from Agence France Presse, taken from the Expatica website.
France to abolish 10 billion euros in tax breaks
President Nicolas Sarkozy announced Friday plans to abolish tax breaks worth 10 billion euros per year, as part of France’s plans to reduce its large public deficit.A statement issued after Sarkozy met his senior economic ministers said general taxation would not increase but that 10 billion euros (12.8 billion dollars) would be raised by abolishing various special tax regimes.
“Any resulting excess in revenues will be entirely assigned to reducing the deficit,” it said, promising to continue with policies of only replacing one retiring civil servant in two and of freezing local government funding. Sarkozy has vowed to maintain state spending at current levels, apart from interest payments and pensions, for the next three years as France battles to bring its ballooning deficit under control.
© 2010 AFP