France’s new prime minister has announced he will raise taxes on wealthy individuals and large corporations. Michel Barnier wants to “improve the national situation.” In concrete terms, the government, newly formed this weekend, wants to maintain its credit rating, it was said.
“I will not continue to raise taxes for all French people, not for the smallest people, not for working people, not for the middle class. But I cannot exclude the richest from national efforts to improve the situation,” Barnier told France 2 television on Sunday.
Debts do not comply with EU rules
France’s total debt stands at almost €3.2 billion, or 110 percent of gross domestic product (GDP). The public sector budget deficit will amount to 6.2 percent of economic output next year. This means that France is not only breaking EU rules, but is also under scrutiny by rating agencies for its creditworthiness.
If its creditworthiness deteriorates, the country will generally have to pay higher interest rates on its government bonds. “A large part of our debt is placed on international and foreign markets. We must maintain France’s credibility,” Barnier said.
New government since Saturday
Two and a half months after the parliamentary elections, France has had a new government since Saturday. After difficult negotiations due to the lack of a clear majority in parliament, President Emmanuel Macron announced the ministerial team, which was dominated by centre-right politicians.
Source: Krone
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