French Taxes Have “Reached The Limits Of Acceptability”, Warns EU Chief
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European Commission President Jose Manuel Barroso has described France’s 2014 budget as “satisfactory”, but warned that more taxes would hurt further growth and employment, according to an AFP report on Monday.
European Commission President Jose Manuel Barroso has described France’s 2014 budget as “satisfactory”, but warned that more taxes would hurt further growth and employment, according to an AFP report on Monday.
Barroso, whose agency is set to give its evaluation for every eurozone nation on Friday, urged Paris to reduce public spending instead and enact broader reforms – in return for an additional two years to bring its public deficit within the EU target of 3 percent of output.
“The budget presented by France this year is satisfactory overall, in our opinion,” said Barroso in an hour-long interview with LCI Television. “(But) today, the fiscal policy in France has reached the limits of acceptability.”
[quote]”France is by far the country (in the EU) where companies pay the highest taxes and that’s a problem for growth and employment.”[/quote]Related: French Unemployment Crisis Could Last A Decade, Warns IMF
Related: French Court Overturns 75% Income Tax on Rich
France has one of the highest tax burdens in the world at 46.3 percent of GDP, according to the OECD. Bloomberg noted that taxes have risen by 70 billion euros over the last 3 years, as a result of government efforts to narrow the country’s budget gap.
Even though next year’s budget foresees far fewer tax hikes than in recent years, the government has struggled to contain revolts over increases in the works.
In the space of several weeks it has been forced to back track on a planned change in corporate taxes and savings products, while President Francois Hollande has also delayed a new tax levy on heavy truck traffic after violent protests in Brittany.
[quote]“There’s no more room to raise taxes,” said Laurent Dubois, a professor at the Institute of Political Studies in Paris. “The French feel taxes are going up and purchasing power is going down. They voted for Hollande thinking they’d afford austerity; that the rich would pay. They realize now that that’s not possible. There aren’t enough rich people.”[/quote]Related: Hollande Admits Deficit Promise Cannot Be Met
Related: France Loses AAA Credit Rating
Two polls published on Monday showed Hollande’s popularity ratings is now at just 22 percent, the lowest for any President under France’s current constitution.
Barroso said that he was confident that “France will face its difficulties” but reiterated the need to trim public spending.
[quote]”I think there has been some progress on certain reforms, not only the labour market. What I have to do … is to encourage them more,” he said.[/quote]
