France gets a €30bn austerity shock from François Hollande U-turn

 

Paris

President François Hollande, confronted with a floundering economy and shrinking popularity ratings, has promised to put France back on its feet within two years.

In a live television interview billed by the media as a "re-launch" of his four-month-old presidency, Mr Hollande warned that France faces €20bn (£16bn) in tax rises and €10bn in spending cuts next year.

Mr Hollande has been criticised for being too indecisive and detached, but on Sunday night he presented himself as an active, personally engaged leader who could rescue France from deep economic crisis by 2014.

"I am in a battle … two years to create a policy for work and competitiveness. I am accelerating," he said. "I know where I am going. I will assume all the responsibility and I will talk regularly to the French people."

In other words, Mr Hollande, who had sworn to abandon the frenetic, can-do style of his predecessor, Nicolas Sarkozy, promised to be more like Mr Sarkozy. His performance was criticised on the right as limp and vague and aroused fears in his own left-wing camp of a shift towards austerity and market-opening reforms.

Of the €30bn needed to reduce France's state deficit next year to the eurozone target of 3 per cent of GDP, Mr Hollande said two-thirds would come from tax rises. This would include his threatened 75 per cent tax on income over €1m. Sports and film actors would not be exempted but earnings from productive investments would be.

President Hollande gave little detail of how €10bn would be cut from the draft 2013 spending plans – already billed as the most austere for three decades. He spoke only of a freeze on hiring in all government departments, save those dealing with security and education. It was announced yesterday, however, that a series of high-profile cultural projects launched by Mr Sarkozy would be scrapped.

During his election campaign, Mr Hollande suggested he could cut the budget deficit while promoting growth, a magic formula that has eluded all other developed economies. Since his victory, the economy has slowed to a standstill and unemployment has topped 10 per cent. As a symbol of his new blood, sweat and tears approach, Mr Hollande said the government would lower its growth forecast for 2013 from 1.2 per cent to 0.8 per cent.

PROMOTED VIDEO
News
ebooksNow available in paperback
News
video
Arts and Entertainment
Jimson Weed/White Flower No 1 by Georgia O'Keeffe
art
Sport
Robin van Persie leaves the field at the King Power Stadium last Sunday
football
Arts and Entertainment
tvPresenter back after daughter's Halloween accident
Arts and Entertainment
Martin Freeman and Benedict Cumberbatch as John Watson and Sherlock Holmes in Sherlock
tv

Co-creator Mark Gatiss dropped some very intriguing hints ahead of the BBC drama's return next year

News
people

London 'needs affordable housing'

News
In this photo illustration, the Twitter logo and hashtag '#Ring!' is displayed on a mobile device as the company announced its initial public offering and debut on the New York Stock Exchange on November 7, 2013 in London, England. Twitter went public on the NYSE opening at USD 26 per share, valuing the company's worth at an estimated USD 18 billion.
news

Arts and Entertainment
Timeshift: The Ladybird Books Story (9pm BBC4 Sun 22 Dec)
BooksLadybird drops branding books for boys and girls
Arts and Entertainment
music Band accidentally drops four-letter description at concert
Life and Style
tech
News
peopleIan Thorpe addresses Ricky Martin rumours
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Female Support Workers / Carers - From £8.00 per hour

£8 - £12 per hour: Recruitment Genius: To assist a young family with the care ...

Recruitment Genius: Customer Service Executive

£20000 per annum: Recruitment Genius: A Customer Service Executive is required...

Argyll Scott International: Commercial Finance Manager

£55000 - £70000 per annum: Argyll Scott International: My client, a world lead...

Argyll Scott International: Commercial Finance Manager

Negotiable: Argyll Scott International: My client, a world leading services pr...

Day In a Page

US immigration: President Obama ready to press ahead with long-promised plan to overhaul 'broken system' - but will it get past a Republican-controlled Congress?

Immigration: Obama's final frontier

The President is ready to press ahead with the long-promised plan to overhaul America's 'broken system' - but will it get past a Republican-controlled Congress?
Bill Cosby rape allegations explained: Why are these allegations coming out now? Why didn’t these women come forward earlier? And why has nobody taken legal action?

Bill Cosby rape allegations explained

Why are these allegations coming out now? Why has nobody taken legal action? And what happens next for the man once thought of as 'America's Dad'
Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain

You know that headache you’ve got?

Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain
Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?

Scoot commute

Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?
Paul Robeson: The story of how an American icon was driven to death to be told in film

The Paul Robeson story

How an American icon was driven to death to be told in film
10 best satellite navigation systems

Never get lost again: 10 best satellite navigation systems

Keep your vehicle going in the right direction with a clever device
Paul Scholes column: England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil

Paul Scholes column

England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil
Michael Dawson: I’ll thank Spurs after we win says defender as he prepares to return with Hull

Michael Dawson: I’ll thank Spurs after we win

Hull defender faces his struggling former club on Sunday ready to show what they are missing. But he says he will always be grateful to Tottenham
Frank Warren column: Dr Wu has big plans for the professionals yet he should stick to the amateur game

Frank Warren column

Dr Wu has big plans for the professionals yet he should stick to the amateur game
Synagogue attack: Fear unites both sides of Jerusalem as minister warns restoring quiet could take 'months'

Terror unites Jerusalem after synagogue attack

Rising violence and increased police patrols have left residents of all faiths looking over their shoulders
Medecins sans Frontieres: The Ebola crisis has them in the headlines, but their work goes far beyond West Africa

'How do you carry on? You have to...'

The Ebola crisis has Medecins sans Frontieres in the headlines, but their work goes far beyond West Africa
Isis extends its deadly reach with suicide bombing in Kurdish capital

Isis extends its deadly reach with suicide bombing in Kurdish capital

Residents in what was Iraq’s safest city fear an increase in jihadist attacks, reports Patrick Cockburn
Underwater photography competition winners 2014 - in pictures

'Mysterious and inviting' shot of diver wins photography competition

Stunning image of cenote in Mexico takes top prize
Sir John Major: Negative West End portrayals of politicians put people off voting

Sir John Major hits out at theatres

Negative West End portrayals of politicians put people off voting
Kicking Barbie's butt: How the growth of 3D printing enabled me to make an army of custom-made figurines

Kicking Barbie's butt

How the growth of 3D printing enabled toy-designer to make an army of custom-made figurines