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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: dybdahl who wrote (64463)	6/26/2010 11:41:22 AM
From: elmatador	Respond to of 219856

France unveils €3.5bn in fresh tax rises. intended to reassure the markets while not scaring the French public about impending austerity –- brings to €13.2bn the amount France aims to raise from tax increases next year. planned tax increases will bring in only slightly less than the £12.1bn the UK envisages from its planned 2.5 percentage point increase in value added tax, which starts next year. The plans are considerably more ambitious than Germany’s austerity programme, which envisages only €11bn of tax rises and spending cuts in 2011. personal and corporate tax breaks would be reduced by €8.5bn rather than by a planned €5bn next year “if the situation required”. France unveils €3.5bn in fresh tax rises By Ben Hall in Paris Published: June 25 2010 14:26 \| Last updated: June 25 2010 20:34 The French government on Friday announced a further €3.5bn of tax rises for 2011 the latest in a series of announcements that puts Paris’s austerity drive on par with Berlin’s much-criticised plan to trim its budget. The latest announcement – intended to reassure the markets while not scaring the French public about impending austerity –- brings to €13.2bn the amount France aims to raise from tax increases next year. The plans are considerably more ambitious than Germany’s austerity programme, which envisages only €11bn of tax rises and spending cuts in 2011. France’s planned tax increases will bring in only slightly less than the £12.1bn the UK envisages from its planned 2.5 percentage point increase in value added tax, which starts next year. François Fillon, prime minister, said personal and corporate tax breaks would be reduced by €8.5bn rather than by a planned €5bn next year “if the situation required”. The series of measures aims to cut France’s public deficit by €40bn, or from 8 per cent of gross domestic product in 2010 to 6 per cent in 2011, as promised to the European Union. This month the French government announced €3.7bn of tax rises on business and the wealthy in 2011 to help plug a hole in France’s pension system. Paris also hopes to raise €1bn next year in a new levy on its banks. Nicolas Sarkozy, president, has repeatedly said the government will not raise taxes, but the plans show the extent to which France is relying on tax increases as its main discretionary measure to reduce the deficit. The government had based its fiscal consolidation plans on GDP growth of 2.5 per cent in 2011 – a forecast the European Commission, the International Monetary Fund and many private sector economist regard as optimistic. “The only way they are not going to break their promise [on the deficit] is to increase taxes and increase them quickly,” said Alexander Law, economist at Xerfi, a Paris-based consultancy. The government is expected to give further details next week on how it intends to freeze central government spending, excluding interests payments and pensions. Mr Fillon again denied that France was conducting its own austerity drive, saying that would mean public sector wage cuts and redundancies, drastic spending reductions and VAT rises, as in Britain. “For the moment, what we are trying to do is avoid that kind of policy,” he said. Speaking a day after France’s trade unions organised the biggest strikes and demonstrations to hit the country in more than a year in protest at pension reforms, Mr Fillon refused to retreat on plans to raise the retirement age from 60 to 62. The government also intends to impose a cash freeze on central government spending excluding interests payments and pensions. It is expected to give further detail next week on how it will achieve such a spending squeeze. One option is to freeze public sector pay. Mr Fillon said the government was prepared to honour a commitment to raise public sector salaries by 0.5 per cent in July. But he said he wanted to open discussions with the unions on the subject, suggesting he could be looking to phase in the increase. The government will also try to trim spending programmes by as much as €6bn a year by 2013.