France rushes out €50 billion budget savings plan

France’s prime minister vowed today the country would honour its European commitments on deficit reduction and rushed out details of a plan to curb spending by €50 billion between 2015 and 2017. 

Manuel Valls, named in a government reshuffle at the end of March after heavy town hall election losses for the ruling Socialists, spelled out the curbs as pressure grew on France to explain how it would meet EU deficit-cutting targets. 

While much of the programme was already known, Mr Valls offered more detail on plans to reduce social welfare spending, including a freeze on pensions and other non-subsistence benefits until 2015, and balance the unemployment funds books. 

Mr Valls brushed off calls from business leaders this week to introduce a new, entry-level minimum wage, saying the current rate - among Europe’s highest - would stay put. 

However his move to curb spending on welfare set Valls on a collision course with unions and left-wing Socialist lawmakers who oppose the government’s embrace of supply-side policies. “The Socialist group (in parliament) discovered the government’s announcements in total silence. 

As it is, they are unacceptable, both in form and in substance,” tweeted Socialist MP Christian Paul. Mr Paul declined to say whether Socialist lawmakers, who hold a slim majority in parliament, would approve the savings plan when it is subjected to a vote in late April.

Read more: France rushes out €50 billion budget savings plan - Economic News | Ireland & World Economy Headlines |The Irish Times - Wed, Apr 16, 2014