Sarkozy says France must pursue German-style reforms
Asserting that Europe is no longer at the “edge of the cliff,” French President Nicolas Sarkozy said the key to economic recovery would be to adopt strural reforms much like those adopted by Germany.
According to the Financial Times, his government will enact a €13bn cut in France’s labour costs, which would be funded by an increase in value added tax to 21.2 per cent from the current level of 19.6 per cent, plus an extra tax on financial income. The increase would begin after the upcoming election.
Another measure to be implemented after the April elections is a 0.1 percent tax on financial transactions beginning in August. The viability and effectiveness of the tax has been questioned by the Bank of France and is opposed by France’s financial sector.