France's government has unveiled an ambitious plan to reduce the national deficit, which has sparked significant debate.

Proposed Budget

The proposed budget aims to achieve approximately 40 billion euros in savings through spending cuts and tax increases. France's debt has reached 3,228.4 billion euros, equivalent to 112% of the country's GDP. The government is under pressure to demonstrate a credible plan to rein in the deficit, which is projected to slip to 6.1% this year. The goal is to reduce this figure to 5% by 2025 and ultimately return to the EU's mandated limit of 3% by 2029.

Savings Breakdown

• Two-thirds of the 40 billion euros in savings will come from spending cuts, with the state expected to contribute 20 billion euros.
• Civil servants and local authorities are targeted for additional savings.
• The social security system is also expected to generate 15 billion euros in savings, including a deferral of pension indexation and reductions in medical consultation reimbursements.

Tax Increases

In a shift from previous policies, the government plans tax increases totaling 20 billion euros. The wealthiest tax households and large companies will face higher tax rates. The government aims to ensure that the most vulnerable and working-class citizens are spared from the brunt of these changes. The government is also targeting polluting transport sectors and plans to impose a tax on the airline industry.

Challenges and Importance

Implementing these measures will be challenging given the current political instability in France. The success of this budget will be pivotal in determining France's economic trajectory and its standing within the European Union.