France to cut 3 bn euros in subsidies, tax rebates

17th July 2013, Comments 0 comments

France's Socialist government will on Wednesday announce 3 billion euros ($3.9 billion) in subsidy cuts and tax rebates as it seeks to rein in its public deficit.

The move is part of a government "modernisation" drive that will also see 201 measures introduced to cut back on red tape for individuals and businesses.

At a cabinet session, President Francois Hollande hailed the measures for "lowering costs for businesses and making life easier for our citizens," government spokeswoman Najat Vallaud-Belkacem told reporters.

Prime Minister Jean-Marc Ayrault is to announce the plan after meeting with ministers on Wednesday, his office said.

Among the measures are reductions in tax rebates on biofuel production and on fuel consumption for businesses, though tax breaks for freight companies will remain.

Subsidies on apprenticeships will be reduced, as will some family benefits. Half of the savings will come from cuts in subsidies to businesses.

With the French economy in recession and unemployment rising, the government is struggling to meet EU-mandated deficit targets.

Brussels has given France a two-year extension to meet the deficit target of three percent of GDP, on condition it pursues tough reforms.

The "simplification" measures are aimed at making life easier for individuals and businesses in their dealings with French bureaucracy.

They include the extension of the validity of identity cards from 10 years to 15 and the replacement of paper lunch vouchers -- used by some 3.5 million people -- with mobile telephone apps or swipe cards.

Other measures will reduce paperwork for drivers, for those seeking social housing and for businesses applying for tax credits.

© 2013 AFP

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