The NY Times reports:
President François Hollande startled the usually staid world of European economic policy with proposals to take France in a centrist direction with tax cuts for companies, reductions in public spending and a business-friendly tone.
That’s a huge turn-around. His initial policies were to massively hike taxes and spending. They have been a disaster, and his popularity at an all time low. So good to see a retreat from them.
Mr. Hollande’s proposals include a cut in payroll taxes that he said would reduce the costs of business and independent workers by 30 billion euros ($41 billion) by eliminating the amount paid by companies and independent workers for the family allocation, a tax that finances an allowance for each child after the first as well as an array of other family benefits.
The family allocation and other benefits are core elements of France’s social programs and have been credited with contributing to it having one of the highest birthrates in Europe. The allowance is income blind, going to all French families.
Mr. Hollande also said he would cut spending by €50 billion but did not specify where.
30 billion of tax cuts and 50 billion of spending cuts. It’s a start.
The current policies have been a disaster. Quarterly economic growth for France for the last ten quarters is below and NZ is in brackets:
- 0% (0.8%)
- 0.2% (0.9%)
- 0.1% (0.7%)
- 0% (0.9%)
- -0.2% (0.2%)
- 0.2% (0.2%)
- -0.2% (1.3%)
- -0.1% (0.5%)
- 0.6% (0.3%)
- -0.1% (1.4%)