France Considers Tax Hikes on Wealthy to Tackle Budget Deficit

Prime Minister Michel Barnier announced potential tax hikes on France's wealthiest individuals and some large corporations to address the nation’s budget deficit. He also expressed openness to changes in President Macron's pension reforms while remaining firm on immigration control. France faces a growing public deficit and economic scrutiny.

Prime Minister Michel Barnier on Sunday signaled the possibility of raising taxes on France's wealthiest individuals and major corporations as part of efforts to close a significant budget deficit. Despite these measures, Barnier promised to protect the financial interests of the lower and middle classes.

This move aligns with President Emmanuel Macron's newly unveiled right-leaning government, which aims to overcome political gridlock following a summer snap election. The looming challenge is to formulate a budget for 2025 while managing a ballooning public sector deficit, projected to reach 6.2% of economic output next year if not addressed.

France's debt level stands at 110% of GDP, approximately 3.2 million euros. The nation's breach of European Union deficit rules and ongoing scrutiny from credit rating agencies add urgency to Barnier's fiscal strategy. He underscored the importance of maintaining France's financial credibility, given that much of its debt is held on international markets.

Barnier also stated his willingness to adapt Macron's pension reforms without compromising the system's financial stability. He emphasized the need to account for the hardships faced by working mothers and invited input from employers and unions.

Amid threats of no-confidence votes from both the political left and far-right, Barnier's government grapples with a lack of majority support. As a strategy to sidestep potential government collapse, Barnier called for tougher immigration controls, advocating for a coordinated European response and stricter domestic policies.

(With inputs from agencies.)