French Premier Plans Up to $20 Billion of Extra Taxes, Parisien Says
(Bloomberg) -- French Prime Minister Michel Barnier plans to announce additional taxes to raise between €15 billion and €18 billion ($16.7-$20 billion) as he looks at ways to regain control of the country’s public finances, according to Le Parisien newspaper.
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He will also delay a target to bring the budget deficit within the European Union ceiling of 3% of output by two years until 2029, the paper said, without identifying the source of the information.
The French Finance Ministry declined to comment.
Barnier is due to face parliament for the first time as prime minister on Tuesday to deliver a make-or-break speech outlining how he plans to rein in public finances while navigating bitter divisions between lawmakers.
According to Le Parisien, Barnier plans to triple an exceptional contribution on top earners to raise €3 billion and impose an extra tax on companies worth €8 billion. In addition, he will set out a €3 billion tax rise on electricity and an additional €3 billion levied on energy companies and share buybacks.
The details may yet change ahead of his speech, while some elements may only be announced when the government puts forward a bill for next year’s budget, Le Parisien said. Finance Minister Antoine Armand has said it will be presented in the week of Oct. 9 and that most of the tightening will come from cutting spending.
Barnier’s newly appointed government last week warned that the budget deficit risks expanding beyond 6% of economic output this year. That forecast has been raised repeatedly from the 4.4% the previous administration initially planned as tax receipts have disappointed and local authorities have ramped up spending.
The slippage has further rattled investors, who dumped French assets already when Emmanuel Macron dissolved parliament in early June. The risk premium on the county’s 10-year bonds over German equivalents has risen to around 80 basis points — around the same level as Spain’s — from below 50 in May.
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