French govt. unveils debt-cutting, pro-business ambitious plan

PanARMENIAN.Net - French Prime Minister Edouard Philippe unveiled an ambitious programme of tax cuts and reduced public spending on Tuesday, July 4 designed to boost investment and end the country's reliance on state borrowing, AFP reports.

Philippe put spurring entrepreneurship at the heart of his first policy speech to the National Assembly after presidential and parliamentary elections in May and June.

The government sailed through a vote of confidence held afterwards, with 370 MPs in the lower house backing it and 67 opposed. There were 129 abstentions.

"Businesses must want to set up and develop on our territory rather than elsewhere," Philippe told the lawmakers, announcing that corporate tax would be cut from 33 percent to 25 percent in the next five years.

Tackling France's "addiction to public spending" was a priority, he said, warning that the public debt now totalled 2.1 trillion euros ($2.3 trillion), nearly the equivalent of an entire year's economic output.

"We are dancing on a volcano that is rumbling ever louder," Philippe told the newly elected lower house.

He announced plans to cut public spending -- currently 56 percent of GDP, one of the EU's highest levels -- by three points and bring the budget deficit in line with an EU limit of 3.0 of GDP this year for the first time in a decade.

He did not, however, detail the some 4 billion euros in cuts needed to meet the deficit target but said some planned tax cuts would be postponed.

The leader of the radical left France Unbowed, Jean-Luc Melenchon, accused Macron of pushing a liberal EU-backed line that "is sinking France and strangling Greece."

"We did not elect Mrs Merkel!" the firebrand Melenchon told the assembly, referring to austerity advocate Chancellor Angela Merkel of EU powerhouse Germany.

The government has already set out one of his boldest reforms: an overhaul of France's rigid labour laws which will give companies more powers to negotiate conditions directly with their employees, skirting industry-wide deals.

The reforms, which Macron wants to fast-track through parliament using decrees, face stiff resistance from leftist opponents.