FRANCE sought to appease anger over tax hikes and EU concerns over its finances yesterday with a 2014 budget bill that focuses efforts largely on savings.
But while businesses will face a smaller tax burden to help boost competitiveness, households will be hit by higher taxes to help cut the deficit, a move that will hurt purchasing power.
The socialist government unveiled its draft 2014 bill under close scrutiny from the EC in Brussels and EU powerhouse Germany, which have given Paris two extra years to bring the deficit in line with EU rules but want to see more reforms and a credible plan to cut spending in return. The budget “has two objectives: stimulate growth and boost jobs,” finance minister Pierre Moscovici said as he announced a public deficit target of 3.6 per cent of economic output in 2014, better than this year’s 4.1 per cent but worse than initially forecast.
France’s new fiscal watchdog said next year’s growth forecast of 0.9 per cent was plausible.
City A.M. Reporter