More tax cuts in France

French Prime Minister Manuel Valls (pictured right) said Monday there would be further tax cuts for low-earning and middle-class households, admitting that previous rounds of tax hikes had been at the center of public anger and a reason why the far-right Front National (FN) had made such big gains at the European parliamentary election. The FN garnered 25 percent of the French vote, compared to 14 percent for the governing Socialists.

"We need more tax cuts, because the burden has become unbearable," Valls told RTL radio. "Until unemployment falls, until purchasing power rises, until taxes drop, the French won't believe us."

Valls had already announced earlier this month that his Socialist government was planning to exempt 1.8 million households from income tax, costing the state 1 billion euros ($1.36 billion).

Savings targets not out of sight?

He insisted, though, that France would maintain its objective of cutting overall public spending by 50 billion euros over the next three years as part of the government’s effort to bring deficits in line with EU limits, saying it would be absurd to give up that goal.

"But we clearly have to do it in the fairest possible way," the prime minister said.

He called for Europe to boost support for growth and employment policies, adding he was convinced the continent could be reoriented to create more jobs, which it hadn't done for years because of austerity programs.

hg/nz (Reuters, AFP)