In order to achieve its ambitious deficit reduction targets, the French National Assembly has essentially restored the initial bill proposed by the government, which contains a raft of targeted tax rises and cuts in public spending.
Certain initiatives introduced by Senators, including the tax on financial transactions and the new top rate of income tax in France of 45% has been voted to be abolished by the France’s lower house. It is expected that the budget will enable the government to meet its deficit reduction targets for 2012 within the framework of 1% growth. The French government emphasized the reduction of public debt sequentially, as a matter of top priority from 5.7% this year, to 3% in 2013, 2% in 2014 and to finally 1% in 2015.
