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French 2014 budget to reflect ‘unprecedented savings effort’

, September 26, 2013, 0 Comments

The French government has presented the national budget for next year. Paris spoke of a huge effort to curb public spending and increase revenues through changes in its tax policy, but businesses got a good deal.

Government officials said Wednesday the 2014 budget would focus on fiscal tightening and keeping a lid on public spending.

With 15 billion euros ($20.24 billion) to be saved next year, Finance Minister Pierre Moscovici (pictured) and Budget Minister Bernard Cazeneuve spoke of “unparalleled budget consolidation efforts.”

Revenues were expected to be boosted by billions by the fight against tax fraud and a planned sales tax hike worth six billion euros. At the same time, Paris said it would do away with a number of tax breaks for families.

Burden unevenly spread?

While French households looked set to have less to spend, businesses were promised a stable tax level next year. When considering special tax breaks to the tune of 10 million euros to support competitiveness, their overall burden will in fact be smaller.

Paris noted the budget was based on a growth forecast of 0.9 percent in 2014, lowered from a previous 1.2-percent prediction, but up from a meager 0.1-percent growth rate expected for the current year.

Despite the efforts made, French public debt is likely to grow to 95.1 percent of economic output next year, with debt servicing costs seen at 46.7 billion euros.

Source: Deutsche Welle |