PARIS-France's Socialist government wants to raise US$9 billion in new revenue from higher taxes on estates, banks and oil companies to try to reduce the deficit. The measures are among those in a revised 2012 budget draft presented at a Cabinet meeting yesterday. It will go to parliament later this month, where it is expected to win approval.
France's new leadership has criticized austerity measures imposed around Europe, saying they are making the region's debt crisis worse. It has focused on higher taxes for the well-off, though some spending cuts are also expected. Prime Minister Jean-Marc Ayrault, speaking at a Fourth of July event at the US Embassy, warned that Europe's debt crisis "has not been extinguished" and that it's not a "problem of the Europeans alone."
The largest new levy will be a one-time surcharge on wealthy individuals' assets to raise €2.3 billion. Another €898 million will be reaped by ending a payroll-tax holiday. Other steps include surcharges for oil and financial companies, each raising an additional €550 million, and a levy on dividends and stock options.
"We face an extremely difficult financial and economic situation," Finance Minister Pierre Moscovici said at a press conference today in Paris. "The wealthiest households, the big companies, will be asked to contribute. In 2012 and 2013, the effort will be particularly large."
France's national auditor said July 2 that the government needs between €6 billion and €10 billion in savings this year to meet its 2012 target of a deficit equal to 4.5 per cent of economic output. For next year, it needs to find €33 billion in savings to achieve its aim of 3 per cent. President Francois Hollande has delayed the goal of a balanced budget to 2017 from the 2016 target set by previous president Nicolas Sarkozy.
AP
