French Junior Minister Says Tax Cuts Can Be Achieved

by Ulrika Lomas, Tax-News.com, Brussels

03 July 2002

Speaking on French radio this week, Deputy Budget Minister Alain Lambert predicted that President Jacques Chirac's government will be able to implement a 30 billion euro tax cutting programme over the next five years without compromising the country's commitment to reducing its budget deficit.

The new French government recently caused controversy within the European Union by pledging to go ahead with pre-election promises to cut taxes despite having agreed to the terms of the EU's Growth and Stability Pact, which stipulates that all eurozone members must attempt to balance their budgets by 2004.

However, at a meeting in Madrid last month, a compromise was reached - President Chirac agreed to reduce his country's budget deficit over the next two years, but only if economic growth comes to 3% in 2003 and 2004.

Speaking to France Inter, M. Lambert suggested that a planned 5% income tax cut this year could be made without increasing the budget deficit, if the government is successful in its drive to reduce expenditure, and the anticipated period of sharper economic growth comes to pass.

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