<img src="https://img.day.az/2024/10/10/800×550/6_-_2024-10-10t121858.511.png" class="article-image" alt="French government hits taxpayers”/>
The French government will present a 2025 budget that includes plans for tax hikes and spending cuts worth 60 billion euros to combat a growing budget deficit.
Day.Az reports, citing Reuters, that the new government of Prime Minister Michel Barnier is coming under increasing pressure from financial markets and France’s European Union partners to take action after tax revenues fell far below expectations this year and expenses exceeded them.
The publication notes that budget cuts equivalent to two points of national output must be carefully calibrated to appease opposition parties, which could not only veto the budget bill, but also unite and topple the government with a vote of no confidence.
“Without a significant majority, Barnier and his allies in President Emmanuel Macron’s camp will have no choice but to make numerous concessions to get the budget bill passed, which is unlikely to happen before mid-to-late December.” .
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Reuters writes that the far-right National Rally, whose tacit support Barnier needs to survive any vote of no confidence, has already helped derail a government proposal to delay pension increases for six months to save 4 billion euros.
“Barnier said he would spare the middle class and instead introduce a temporary additional tax on large companies and people earning more than half a million euros a year.
However, all taxpayers will be affected by plans to restore the electricity consumption tax to pre-extraordinary cuts during the 2022-23 energy crisis.
The government said the budget bill would cut the government deficit to 5 percent of gross domestic product (GDP) next year from 6.1 percent this year – higher than almost all other European countries.
While the tax increase will account for a third of the 60 billion euro budget cuts, the rest will come from spending cuts: 20 billion will go to French ministries, and the rest will go to separate spending on social security, health care, pensions and local budgets.” – the publication summarizes.