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France's new PM targets welfare in drive to cut spending


Text by FRANCE 24

Latest update : 2014-04-16

France’s Prime Minister Manuel Valls on Wednesday targeted the country’s generous welfare system in an aggressive drive to cut state spending by €50 billion, announcing a state pension freeze and a trimmed budget for social benefits and healthcare.

Manuel Valls was appointed to the prime minister's post on March 31, replacing Jean-Marc Ayrault after the ruling Socialist Party suffered stinging reverses in municipal elections in March.

The Socialist government has pledged to save 50 billion euros by 2017 in order to fund tax cuts for individuals and companies aimed at reviving a flagging economy and reducing unemployment.

In appointing Valls, President François Hollande tasked the former interior minister with implementing the country’s shift towards more business-friendly economic policies.

Although the broad outlines of where the cuts would fall had already been announced, the final details are likely to prove controversial with those in the ruling party who were dismayed by Hollande’s choice of prime minister.

More than 40 percent of the savings will come from cuts in social benefits and healthcare.

Another 18 billion is to be trimmed from the budgets of government ministries and the remaining 11 billion will come from a rationalisation of local government, Valls said.

Valls said a range of social benefits, including state pensions, would be frozen until October 2015 and confirmed that a pay freeze for civil servants would remain in place.

The former interior minister said that with public spending accounting for 57 percent of the country's wealth and the national debt spiralling, France had no option but to reduce the size of the state.

"We cannot afford to live beyond our means.

"And we have to break with this logic of debt which slowly, progressively, is tying our hands."

(FRANCE 24 with AFP)


Date created : 2014-04-16


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