France's Bold Move to Slash Electricity Tax Caps

The French government plans to remove caps on household electricity taxes to address financial shortfalls. The move, deemed necessary by Budget Minister Laurent Saint-Martin, is part of a 60 billion euro belt-tightening effort to control France's deficit and adjust energy costs amidst stable inflation rates.

In an attempt to address a significant financial shortfall, the French government intends to remove caps on household electricity taxes. Budget Minister Laurent Saint-Martin emphasized the necessity of this move, which aims to recover the billions of euros previously expended by taxpayers due to these caps.

This initiative is part of a broader 60 billion euro belt-tightening effort designed to manage France's spiraling deficit by achieving new fiscal targets. The proposed tax hike could bring electricity rates back to pre-2022 levels, without increasing consumer bills, thanks to decreased base electricity costs, Saint-Martin assured.

Prime Minister Michel Barnier pledged to decrease the budget deficit to 5% of GDP by 2025. However, the aim to align with the euro zone's common 3% deficit goal has been postponed from 2027 to 2029. Without urgent measures, the deficit may exceed 7% next year.

(With inputs from agencies.)