France May Face New Fiscal Burdens

France May Face New Fiscal Burdens

According to the commissioner for economic affairs of the European Union, Socialist-led government-imposed increases in tax have touched a critical level.

Olli Rehn is of the belief that a run of increases in tax ever since the Socialists have come into power back 14 months, has been risking the destruction in growth. Also, the creation of jobs could be damaged by the same.

The tax increases may include the _33bn this year in new taxes, the report said.

The warning by Mr. Rehn came when President François Hollande along with Prime Minister Jean-Marc Ayrault has decided to finalize plans for long-term pension reform and deficit cuts.

It is being said that the reform would probably cause French businesses and households to face new financial burdens in the coming year. The plan is also to press ahead with a green tax or a carbon tax, so that the French economy could be pushed away from fossil fuel dependence.

Mr. Ayrault vowed during a speech to La Rochelle's Socialist Party "summer university" that the form of a fiscal "reshuffle" would be taken by the green tax. The overall tax burden would not see an increase.

"Higher taxes would destroy growth and handicap the creation of jobs. Budgetary discipline must now depend on cuts in public expenditure, not on new taxes", affirmed Mr. Rehn.

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