France freezes benefits in cuts drive
France's new Prime Minister Manuel Valls on Wednesday announced a freeze in state pensions and other benefits as part of a plan to cut government spending by 50 billion euros ($70 billion).
The Socialist government has pledged to make the cuts over the course of three years (2015-17) in order to fund tax cuts for individuals and companies aimed at reviving a flagging economy and reducing unemployment from record levels.
The broad outlines of where the cuts would fall had already been announced but the final details are likely to prove controversial with those in the ruling party who were dismayed by President Francois Hollande's appointment of the centrist Valls to run his government.
Valls was promoted after the Socialists suffered stinging reverses in municipal elections last month and Hollande has charged him with implementing the shift towards more business-friendly economic policies that the president announced in January.
More than 40 percent of the savings envisaged (21 billion euros) will come from cuts in France's generous system of social benefits and its highly prized healthcare system.
Another 18 billion is to be trimmed from the budgets of government ministries and the remaining 11 billion will come from a rationalisation of local government, Valls said.
Valls said a range of social benefits, including state pensions, would be frozen until October 2015 and confirmed that a pay freeze for civil servants would remain in place.
The former interior minister said that with public spending accounting for 57 percent of the country's wealth and the national debt spiralling, France had no option but to reduce the size of the state.
"We cannot afford to live beyond our means.
"And we have to break with this logic of debt which slowly, progressively, is tying our hands."
© 2014 AFP