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France to announce new austerity budget

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France to announce new austerity budget


Pension reform is at the top of the list of austerity measures to be announced today by the French government.

Determined to hold on to its treasured “triple A” credit rating, up to eight billion euros worth of cuts are expected.

But according to an exclusive in one newspaper, the retirement age will not be changed, with other reforms of the system being brought in early.

The measures will be Prime Minister Francois Fillon’s second reform package since August when he announced a plan worth 12 billion euros.

Although a general increase in VAT has been ruled out as a way of reducing the deficit, some sectors such as restaurant meals which don’t currently take the full 19.6 per cent rate, will be raised from 5.5 per cent to 7 per cent. Building renovations will also be hit by a VAT hike.

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