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.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Environmental Adviser - Maternity Cover

£37040 - £43600 per annum: Recruitment Genius: The UK's export credit agency a...

Recruitment Genius: CBM & Lubrication Technician

£25000 - £27500 per annum: Recruitment Genius: This company provides a compreh...

Recruitment Genius: Care Worker - Residential Emergency Service

£16800 - £19500 per annum: Recruitment Genius: Would you like to join an organ...

Recruitment Genius: Senior Landscaper

£25000 - £28000 per annum: Recruitment Genius: In the last five years this com...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones