France's Macron looks to match tax cuts with spending cuts

France's Macron looks to match tax cuts with spending cuts

French President Emmanuel Macron has ordered that further cuts to income tax must be matched euro-for-euro by cuts in public spending to keep the budget deficit from spiraling out of control, his finance minister said on Friday, reports Trend with reference to Reuters

In his response to months of anti-government protests, Macron said late on Thursday that he would cut income tax further by 5 billion euros ($5.6 billion).

“The president has set a principle of which I am the guarantor: each euro of decrease in income tax must be financed by a decrease of one euro in public spending,” Finance Minister Bruno Le Maire told LCI television.

Macron said people would have to work longer to pay for lower taxes, and promised pension increases for the poorest.

Macron is seeking to reboot his presidency after five months of protests against high taxes and what demonstrators see as elitism from the political establishment, which they say is embodied by the 41-year-old Macron, a former investment banker.

More protests are expected on Saturday, which will mark the 24th straight weekend of unrest. Thousands have been arrested, and the often violent demonstrations have driven away tourists, kept shoppers off the streets and discouraged business.

Vowing to stay the course on his pro-business reforms, Macron largely dodged protesters’ demands for more radical measures, such as reinstating a wealth tax.

The tax cut comes on top of a 10 billion-euro package of concessions to protesters in December, which was aimed at boosting the income of the poorest workers and pensioners.

“The latest measures are fiscally expansionary and the risk is that funding them through spending cuts may prove difficult,” Morgan Stanley economist Matthew Pennill wrote.

“The overall plan represents a sizeable fiscal boost to the economy. That’s good from a growth perspective. But, despite a better budget outturn in 2018, we see risks of extra (debt) issuance going forward, with large-scale fiscal consolidation now looking less likely,” he wrote.

Le Maire said the tax cut would benefit 15 million households, the vast majority of taxpayers. Budget Minister Gerald Darmanin said it would ease the burden on all but the wealthiest taxpayers by about 10 percent from next year.

That works out to about 300 euros more per household, the OFCE economics think tank’s Mathieu Plane told Reuters.


Among the measures announced, Macron said pensions of less than 2,000 euros a month would be pegged to inflation, which Darmanin said would cost 1.4 billion euros from next year.

Macron also pledged to set a minimum pension of 1,000 euros a month, which was welcomed by Laurent Berger, the head of France’s biggest union, the reformist CFDT.

“Everything will depend on how words become acts. We’ll see if acts follow,” Berger said.

In addition to spending cuts, Macron said tax cuts would be offset by scrapping tax loopholes for companies, which are also benefiting from a gradual reduction in corporate tax.

However, Macron said that ultimately the French would have to work longer, as in other European countries. He ruled out pushing back the minimum retirement age of 62, though, saying people would be given incentives to work longer.

Nearly two-thirds of people polled shortly after the press conference found Macron to be unconvincing, according to a Harris Interactive survey.

“We’re far from the ambition we were hoping for, so we’re going to keep fighting, but there’s also no question for me that some overtures were made,” the CFDT’s Berger said.

Subscribe to Trend in Google News! Subscribe
EU Commissioner for Energy to visit Azerbaijan
EU Commissioner for Energy to visit Azerbaijan
Azerbaijan, Iran talk military cooperation
Azerbaijan, Iran talk military cooperation
Azerbaijani chess player continues to lead in Tata Steel Masters tournament
Azerbaijani chess player continues to lead in Tata Steel Masters tournament
Loading Bars
French EU lawmaker Collard joins far-right presidential candidate Zemmour
Pfizer, Moderna boosters up to 90% effective against Omicron: CDC
Turkey’s Turkovac to be tested as booster for Pfizer-BioNTech jab
Guinea junta establishes council to lead transition to elections
Visit aims to rebuild trust with Lebanon: Kuwait foreign minister
UK records 76,807 new COVID cases, 297 deaths
EU Commissioner for Energy to visit Azerbaijan
Pfizer CEO sees annual COVID vaccine rather than frequent boosters
US Dept of State plans to begin evacuation of US embassy staff from Kiev on Jan 24
Blast hits western Afghan city of Herat, killing at least six
Georgia’s coal imports from Kazakhstan triple
Presidential administration of Georgia submits candidates for election commission to parliament
Remittances to Uzbekistan in 2021 totaled USD 8 bln
Iran seeks long-term, all-out ties with Turkey - Raeisi
Massive California wildfire triggers evacuations, closes highway
Italy's Berlusconi decides against running for president
Azerbaijan, Iran talk military cooperation
Azerbaijani chess player continues to lead in Tata Steel Masters tournament
Serviceman of Azerbaijan Army dies in non-combat conditions
Number of Turkish jobseekers in Uzbekistan revealed for 2021
UAE stops all private drone activities, light sports aircrafts
Airbus cancels $6bn contract with Qatar Airways
German conservatives elect right-winger Merz as new party leader
Non-hydro renewables overtake hydro for first time in Turkey
Record-breaking indicators in non-oil sector - what is secret to success of Azerbaijan's economic strategy?
Iran shares data on exports from Aras Free Trade Zone
Kazakhstan names damage caused to business as result of large-scale rallies
Georgia publishes COVID-19 data for January 22
Iran’s Bahar Azadi gold coin price dips
India now allows 6 people to register on one number for Covid vaccination
Azerbaijan shares data on number of vaccinated citizens
Azerbaijan confirms 1,614 more COVID-19 cases, 610 recoveries
Azerbaijan changes rules for quarantine control of Covid-19
India's Karnataka approves design & launch of nano-satellite by govt school students at Rs 1.9 Cr
‘One Modi cannot change a country, need more icons like him’: Himanta Biswa Sarma
Seizing of illegally stored weapons from citizens continues in Kazakhstan - interior minister
Azerbaijani border serviceman commits suicide in military hospital
Iran unveils details of agricultural export
Kazakh Armed Forces performing tasks to ensure public order in regions with “red” level of terrorist threat
Tokyo hits record 10,000 COVID cases, Japan over 50,000 for first time
Number of COVID-19 infections in Russia surpasses 11 mln since pandemic began
Kazakhstan developing measures to reform Samruk-Kazyna Fund's activities
PMO records surge in load/unload operations at Iranian ports
S&P predicts gas production growth in Azerbaijan through 2025
Turkmen medical enterprise discloses production data
Azerbaijan to hold auction for Ferrum Kapital CJSC's bonds
Kazakh president talks need to continue work to reveal all circumstances of recent riots
Kazakh oil and gas company to purchase helium via tender
Iran reveals COVID-19 data for January 22
Oil price spikes likely in 2022 amid inventory tightness midyear
7 killed, 16 injured in massive fire in central Mumbai high-rise
Oil demand to be robust in coming years despite net-zero strategies
India reports 3,37,704 new Covid cases, 488 deaths in 24 hours
Number of COVID-19 infections in Russia surpasses 11 mln since pandemic began
OPEC+ focus to switch away from propping up prices
Iran shares data on buy/sell operations at its Mercantile Exchange
Most people feel I-T exemption limit could be raised from Rs 2.5 lakh: India's KPMG
Turkmenistan’s Balkandokma complex doubles cotton yarn sales
Uzbekistan reveals data on agricultural, forestry and fisheries production
Tax benefits to increase disposable income likely in India's Union Budget
Uzbekistan approves procedure for rational use of land resources
S&P discloses inflation forecast for Azerbaijan through 2025
S&P Global Ratings announces forecast for Azerbaijan's budget surplus
Magnitude 6.2 earthquake strikes Unalaska, Alaska
NIOC agrees with Russian companies to develop Iran's oil, gas fields
SOCAR dismisses information about purchasing bitumen plant in Armenia
Kazakh company eyes to import leather products from Uzbekistan
S&P comments on possible swap line between Central Banks of Azerbaijan and Turkey
Oil production in Azerbaijan to moderately rebound - S&P
Georgia discloses its main cement sources of import
Turkmenistan lays out plans for hydrogen energy development
US lawmakers seek litigation at WTO against India on wheat subsidy
Iran, Azerbaijan continue construction of Khudafarin and Giz Galasi hydro junctions (PHOTO)
Climate policy of Uzbekistan: Implementation of measures to prevent climate change and adaptation in most vulnerable sectors of economy
S&P Global Ratings approves Azerbaijan's credit rating at 'BB+/B'
UK Foreign Secretary to meet with Lavrov in Moscow in February
Netaji’s statue at India Gate to be 25 feet high: NMAG director
India to allow arms manufacturers to enhance production
Kazakhstan names Samruk-Kazyna's entreprises planned to be put up for IPOs
Iranian currency rates for January 22
Statistical center of Iran reveals figures of growing inflation
Azerbaijan reduces quarantine period for COVID-19 patients
Kazakh Gas Processing Plant opens tender on manufacturing of parts for pumping equipment
Azerbaijan's Kalbajar - most suitable for winter tourism among liberated areas, agency says
EAM Jaishankar dials envoys in US, Canada after 4 Indians freeze to death along US-Canada border
Balkan Shipbuilding Yard in Turkmenistan to build new ships
Uzbekistan shares domestic COVID-19 data for Jan.21
Azerbaijani oil prices decline
Azerbaijan talks probability of commercial oil & gas reserves at Aypara area in Caspian Sea
GM sets $6.5 bln for in Michigan electric vehicle plants -document
Georgia – Turkey trade turnover up
Subhas Chandra Bose's family members welcome PM's decision on Netaji's statue at India Gate
Kazakhstan talks business support measures related to tax legislation
Iran resumes gas export to Turkey
Central Bank of Azerbaijan fully meets demand at foreign exchange auction
US commits to helping Saudi Arabia, Gulf partners defend against threats from Yemen
NYPD officer killed, another seriously wounded in shooting
Poland, Georgia to hold Joint Intergovernmental Commission meeting – ministry
Saudi-led coalition denies targeting detention centre in Yemen's Saada
Arnold Schwarzenegger involved in car accident
All news