PARIS: French Prime Minister Edouard Philippe announced plans to tame public spending and bring down the country’s “intolerable” public debt, warning the country was “dancing on a volcano”. France’s €2.147 trillion debt makes the eurozone’s second-biggest economy vulnerable to speculation, he said in his first general policy speech to parliament. “We are dancing on a volcano that is rumbling ever louder,” he said, announcing plans to wean the French off their “addiction” to public spending.
Philippe said centrist President Emmanuel Macron’s government would aim to bring down public spending as a percentage of GDP by three points from 56% currently – one of Europe’s highest levels. Philippe said the savings would be achieved by controlling the public sector wage bill, scrapping all tax loopholes and adopting a more results-driven approach to spending in areas such as housing and professional training. He also pledged to slash corporate taxes to make France more attractive to investors.
“France cannot remain the champion both of public spending and taxes,” the premier said. “Businesses must want to set up and develop on our territory rather than elsewhere,” he told lawmakers, announcing a progressive lowering of the corporation tax rate from 33.3% to 25% by 2022. He also reiterated the government’s ambition of bringing the deficit within an EU limit of 3% of GDP this year. Philippe also announced “a grand investment plan” worth €50 billion in areas including the environment, health, agriculture and transport. Stressing the importance of “investing in the sectors of the future”, Philippe told parliament that the package would also focus on developing skills.