(Reuters) – Socialist President Francois Hollande unveiled higher levies on business and a 75-percent tax for the super-rich on Friday in a 2013 budget aimed at showing France has the fiscal rigor to remain at the core of the euro zone.
The package aims to recoup 30 billion euros ($39 billion) for the public purse with a goal of narrowing the deficit to 3.0 percent of national output next year from 4.5 percent this year – France’s toughest single belt-tightening in 30 years.
But the budget dismayed business and pro-reform lobbyists by preferring tax hikes and a simple freeze of France’s high public spending to attacking ministerial budgets as Spain did this week in its battle to avoid an international bailout.
With record unemployment and a barrage of data pointing to economic stagnation, there were also fears the deficit target will slip as France falls short of the modest 0.8 percent economic growth rate on which it is banking for next year.
“This is a fighting budget to get the country back on the rails,” Prime Minister Jean-Marc Ayrault said, adding that the 0.8 percent growth target was “realistic and ambitious”.
“It is a budget which aims to bring back confidence and to break this spiral of debt that gets bigger and bigger.”