PARIS (AP) — The French government has lowered its economic growth forecast for next year to 1.7 percent and unveiled plans to cut public spending in an effort to stay in line with European Union budget commitments.
In an interview Sunday with Le Journal du Dimanche, Prime Minister Edouard Philippe said the government will base its 2019 budget on that reduced estimated growth, down from the previous estimate of 1.9 percent. He said France is still committed to be in line with European Union rules regarding public deficits.
“If growth slows down, there will naturally be an impact,” he said. “But that will not prevent us from sticking to our commitments on cutting taxes while controlling public spending and debt.”
Philippe explained some measures included in the 2019 budget, which is to be formally presented at the end of September. He said pensions and family and housing benefits will not be pegged to inflation anymore — meaning they will increase at a more moderate pace.
He promised that the government would not cut down benefits aimed at helping the poorest.
He said the French government will cut 4,500 public service jobs next year and 10,000 in 2020.
President Emmanuel Macron has pledged to pursue labor changes in the coming months, with a focus on small businesses, in an effort to boost growth.
Philippe also unveiled plans to reduce taxes paid by workers on overtime hours, starting from September 2019. He said the measure will provide an additional 200 euros ($233) per year to workers who earn the French minimum wage.
The measures prompted immediate criticism from both the left and from the right.
Gilles Platret, spokesman of the conservative party, The Republicans, denounced the proposals in a tweet, calling them an “attack against families and pensioners, who will see a decrease in their purchasing power.
Far-left lawmaker Alexis Corbiere from the Rebel France party called the proposals “social regression” on BFM TV.