France to raise taxes on the rich

French Prime Minister Francois Bayrou has announced plans for a new tax on the country’s wealthiest citizens as part of a sweeping austerity package designed to rein in public debt and cut the budget deficit.

The measures include a “solidarity contribution” aimed at high earners to help bridge a €43.8 billion ($47.5 billion) budget shortfall. A levy already in place targeting individuals making over €250,000 ($270,000) will now likely be expanded.

“The effort of the nation must be equitable. We must ask little of those who have little, and more of those who can do more,” Bayrou said on Tuesday.

France’s budget deficit hit 5.8% of gross domestic product (GDP) last year, nearly double the official EU limit of 3% of GDP.

Among Bayrou’s more contentious proposals is scrapping two national public holidays — Easter Monday and Victory Day on May 8 — to boost productivity. Right-wing leader Jordan Bardella condemned the proposal as “a direct attack on our history and roots.” Other cost-cutting measures in Bayrou’s plan include capping healthcare expenditures and freezing pensions and social benefits at their 2025 levels.

Defense spending, however, will increase.

France’s military budget is slated to rise to €64 billion ($69 billion) in 2027, double what the country paid in 2017. President Emmanuel Macron has unveiled an additional €6.5 billion ($7 billion) in defense funding over the next two years, citing heightened threats to European security.

A new defense review has warned of a potential “major war” in Europe by 2030, listing Moscow among the top threats. The Kremlin has dismissed claims that it is planning to attack the West, and has accused the NATO states of using Russia as a pretext for military expansion.

France’s public debt has reached €3.3 trillion ($3.6 trillion), equivalent to around 114% of GDP. The left-wing parties have accused the government of prioritizing military spending over social welfare, fearing that essential public needs are being sacrificed under the guise of security. Jean-Luc Melenchon, leader of La France Insoumise party, has called for Bayrou’s resignation, saying “these injustices cannot be tolerated any longer.” 

Bayrou must secure parliamentary backing for his proposals before presenting the full budget plan in October.

A new defense review has warned of a potential “major war” in Europe by 2030, listing Moscow among the top threats. The Kremlin has dismissed claims that it is planning to attack the West, and has accused the NATO states of using Russia as a pretext for military expansion.

France’s public debt has reached €3.3 trillion ($3.6 trillion), equivalent to around 114% of GDP. The left-wing parties have accused the government of prioritizing military spending over social welfare, fearing that essential public needs are being sacrificed under the guise of security. Jean-Luc Melenchon, leader of La France Insoumise party, has called for Bayrou’s resignation, saying “these injustices cannot be tolerated any longer.”

Bayrou must secure parliamentary backing for his proposals before presenting the full budget plan in October.