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Tax hikes and spending cuts star in French budget

Tax hikes and spending cuts star in French budget
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France has unveiled its budget plans for 2014, which, according to the French Finance Minister Pierre Moscovici: “has two objectives: stimulate growth and boost jobs.” However, as the tax burden on business falls in an attempt to boost competitiveness, households will be hit by higher taxes to reduce the deficit, the move is likely to squeeze families and individuals and hurt purchasing power.

The Socialist government has tried to offset the fury at yet more tax hikes by announcing cuts to improve France’s public spending with a 15 billion euro reduction.

Tax rises will bring in an extra three billion euros.

French Finance Minister Pierre Moscovici explained his thinking:
“This is a budget, which focuses all its energy in one direction, that is to make France more competitive, to create French jobs and encourage innovation. We have also cut public spending.”

As ordinary French citizens grumble over taxation the number of unemployed in the country has fallen by 50,000 for the first time in two years.

The drop may give some succor to a deeply unpopular government, but the Ministry of Employment added that “the numbers are encouraging, but must be treated cautiously.”

Many believe that France will record a rise in unemployment by the end of the year.