France unveils new austerity measures

The French government says it will raise taxes to restore the country's fiscal health amid Europe's deepening debt crisis.

Prime Minister Francois Fillon announced a new package of austerity measures on Monday.

The move came after the government revised down its growth forecast for fiscal 2012 from 1.75 percent to one percent.

The package includes tax increases and spending cuts amounting to 7 billion euros, or 9.6 billion dollars, to slash its deficit to 4.5 percent of GDP in 2012.

The government will raise the sales tax and increase the rates for major corporations.

French President Nicolas Sarkozy and members of his cabinet agreed to salary freezes and called on business leaders to follow suit.

Fillon said that a new retirement age of 62, up from the current 60, will take effect from 2017, one year earlier than originally planned.

The prime minister also said that 110 billion euros, or 151 billon dollars, is needed to balance the budget by 2016.

Fillon said the word "bankruptcy" is no longer an abstract word, and called for public understanding for the austerity measures.

Tuesday, November 08, 2011 07:22 +0900 (JST)