Demonstrators hold a banner which reads “No to the austerity, yes to the social Europe” during a rally in Paris against the austerity measures announced by the French government (file photo).
A European Union official says France must stop raising taxes for fear of jeopardizing the countryâ„¢s growth and a higher number of unemployed people in the European country.
Å“The tax increases in France have reached their fateful point. Raising new taxes would break growth and weigh on employment,” the European Commission’s economic chief Olli Rehn said in an interview with French weekly Le Journal du Dimanche published on Sunday.
The EU official went on to say that Å“Budgetary discipline must come a reduction in public spending and not new taxes.”
France is struggling to revive an economy that has barely grown in more than two years and to tackle unemployment, which soared to a 14-year high of 10.8 percent in the first quarter of 2013.
Even though the government of President Francois Hollande has increased taxes and implemented several reforms and spending cuts in an attempt to lower the country’s huge debt load, the measures have proven unproductive since the financial crisis in the eurozone has not been resolved and the 17-member bloc is still bogged down in recession.
On August 10, French Finance Minister Pierre Moscovici said the European country has cut its economic growth forecast for 2013.
Å“This year, growth will be weak and spread out, between minus 0.1 percent and plus 0.1 percent,” Moscovici said.
In April, French officials predicted that the country’s economy would grow by 0.1 percent in 2013.
On August 5, the IMF urged France to ease the pace of its austerity policies aimed at bringing the budget deficit under control.
It also added that the country should further reduce its spending without raising the taxes. The report said that taxes in the eurozone’s second-largest economy are already Å“among the highest by international standards” and raising them can impede investments and job creation.
Republished from: Press TV