France’s new Prime Minister slashes taxes and spending

Manuel Valls, the new French Prime Minister has pledged to cut both taxes and public spending in a drive to improve the French economy.

Clément Bucco-Lechat via Wikimedia Commons

Manuel Valls, the new French Prime Minister has pledged to cut both taxes and public spending in a drive to improve the French economy.&#x;In his maiden speech to the French parliament he outlined plans to cut the country&#x;s large budget deficit. &#x;In contrast to the British and German approaches however, he said that he would not implement austerity measures.&#x; To cheers from French deputies he said, "I am all for respecting our commitments, for budgetary rigour, but not for austerity".Mr Valls said France had experienced "too much suffering and not enough hope", although he also vowed to cut labour costs by &#x;30 billion (&#x;25 billion) over the next two years to combat unemployment.The new Prime Minister said that France would remain committed to an EU agreement for the country to reduce its budget deficit to 3 per cent of output by the end of 2015 from 4.3 per cent in 2013, but did not comment on whether he would seek an extension of the EU imposed deadline.France is currently suffering from weak economic growth and an unemployment rate of around 11 per cent. Against this background, Mr Valls was dramatically appointed by the French President, Francois Hollande after the ruling Socialist party suffered a humiliating set of results at the nationwide municipal elections 30 March. The party lost control of 155 towns across the country, and its overall vote slumped to just 40 per cent.Spanish-born Manuel Valls has been compared by some to former President, Nicolas Sarkozy, as both men previously served as Interior Minister and cultivated an image of toughness. In 2009, Mr Valls reportedly called on the Socialist Party to abandon its name because he felt that he word &#x;Socialist&#x; recalled 19th-century ideas and was &#x;undoubtedly outdated&#x;. Then in 2011, he claimed that the 35-hour limit to the working week was holding France back.Following his speech to the French parliament yesterday and the unveiling of his new cabinet (slashed from 38 members to 16) French deputies passed a vote of confidence of 306 to 239 in support of the new government.Mr Valls has also confirmed that the number of administrative regions in France will be cut by half and that would he plans to make massive cuts to France&#x;s payroll taxes that currently rank among the world's highest. This will mean cutting the corporate income tax to 28 per cent from 33 per cent &#x; delivering around &#x;5.5 billion in tax cuts for the middle-class.The aim is to increase &#x;what you're getting at the end of the month,&#x; the French Prime Minister said, so that even those workers earning the &#x;1,350 per month minimum wage could be better off by &#x;500 a year.&#x;For more news and articles on France such as Transfer of power in Paris and Is London France&#x;s &#x;sixth city&#x;? go to Re:locatemagazine.com