French Economic Reforms Announced In Budget
by Stewart Douglas
French President Nicolas Sarkozy has today unveiled his first national budget, with an emphasis on economic growth and increasing tax revenue to fund commercially considered policy.
The budget opened a chain of new measures designed to promote and nurture business and economic growth within France as part of Sarkozy’s wider agenda for economic reform, which has seen the French economy post a series of eurozone-beating results in recent months.
Employers have been offered financial incentives to encourage employees to work beyond the traditional work week in order to stimulate a new work ethic around longer hours to bring France in line with its European counterparts.
At the same time, those in the top income tax bracket are to benefit from a reduction in tax rates in order to encourage the wealthiest population to pay French taxes, rather that moving their money offshore as is the case at present.
The measures, designed to enable businesses to be more productive and increase growth, are to be funded by an overall increase in tax receipts derived from a reformed tax structure, which it is hoped will propel the French economy beyond many of its close European counterparts.
Civil servant numbers are to be slashed by almost 30,000, with the bulk of them being retirees, whilst measures to cut the national deficit are being proposed to help eradicate it completely within the next five years.
Sarkozy had expected growth to be within the 2% to 2.5% range over this year and next, which remains the case albeit that growth will possibly remain towards the lower end of that spectrum for the period.
The measures are predicted to help the French economy surpass existing eurozone targets whilst overturning traditional attitudes that hinder growth and economic development.
Since Sarkozy’s election analysts have seen a return in confidence to French markets, with a view to possibly more stable long term growth.
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