French Prime Minister Michel Barnier on Sunday called for a "national effort" to cut the country's public-sector deficit, but ruled out across-the-board tax rises. His new government is under pressure to prepare a budget before 1 October.
A day after President Emmanuel Macron appointed a new government, Prime Minister Michel Barnier told the France 2 broadcaster that the government's financial situation was "very serious".
The situation required measures to rein in spending and raise income, he added – and high earners would have to "do their bit" to help France's finances recover.
But there would be no income-tax increases for "people with low incomes, or wage earners, or the middle-income class", he said.
"I am not going to increase the tax burden for all French people further, they already pay the highest taxes among all EU partners," he said.
Who is France's new prime minister Michel Barnier?
Barnier, who heads up a government condemned by its critics as too far to the right, promised to move fast to tackle the country's most pressing problems.
As he geared up for his first cabinet meeting on Monday afternoon, Barnier called for "the greatest possible cohesion" within the government, and for a willingness to find "compromise".
His government's most immediate and daunting task will be to put together a budget for 2025 to be submitted to lawmakers by 1 October.
France's total debt stands at 110 percent of GDP, or close to €3.2 trillion.
Weaker-than-expected tax revenues and higher spending by local governments has left its public sector budget deficit spiralling towards 6.2 percent of economic output next year if nothing is done to rein it in.
It is in breach of European Union deficit rules and credit rating agencies are scrutinising French decision-making carefully.
"A large part of our debt has been placed on international and foreign markets. We have to maintain France's credibility," Barnier said.
Barnier, who was the EU's lead negotiator during Britain's Brexit negotiations, also said he was also open to changes to Macron's pension reform but that any changes should not undermine the pension system's precarious finances.
Tilt to right as French PM Barnier appoints government after months of deadlock
He said by way of example that he wanted to better take into account the hardships faced by working mothers over the course of long careers and that he was open to the input of employers and unions.
Macron's political opponents on the left and far right have already threatened votes of no confidence against Barnier's government. They say the government is not a reflection of how the French voted in the July poll.
"This is more Macron. It's a government that has no future," Jordan Bardella, chairman of Marine Le Pen's National Rally party, earlier said.
Barnier's government lacks a majority and will need to keep the far-right on side and deter it from voting to bring the government down if it is to survive. Perhaps with that in mind, Barnier said he would get tough on immigration.
"We need a European response. We need to take action at home too," Barnier said. "We need to deal with the immigration issue much more rigorously."
(with newswires)
