Monday, August 27, 2018

Austerity in France

 In France Macron's government sold its pro-business reforms on promises that they will boost growth and jobs, but Philippe said that growth would be weaker than expected.

Prime Minister Edouard Philippe said, "But that does not prevent us from sticking to our commitments on reducing taxes while reining in public spending and debt."

The government has been under pressure from Brussels and the International Monetary Fund to detail plans to rein in public spending.

Philippe said the government is particularly keen on reducing spending on what he described as ineffective policies such as housing or subsidised jobs. He said that housing allowances, family welfare benefits and pension payouts would increase by only 0.3 percent in 2019 and 2020. That is far less than the 1.5 percent average inflation rate economists polled by Reuters expect next year and the 1.8 percent expected in 2020. Meanwhile, the government would consider reducing unemployment benefits over time, Philippe said. Philippe claimed that the government's policies were designed to reward workers and discourage unmeasured increases in welfare handouts.
"This is going to be a real bloodbath for the state and the public services," far-left leader Jean-Luc Melenchon told reporters.

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