New Prime Minister Manuel Valls won a vote of confidence in parliament on Tuesday after unveiling planned tax and public spending cuts, vowing to bring France's public deficit down while resisting outright austerity, reports Reuters.
In a keynote speech to the National Assembly after being chosen last week by President Francois Hollande, Valls said an over-strong euro was damaging economic recovery, complaining that the monetary policy of the independent European Central Bank was "less expansionist" than that of its international counterparts.
Deputies backed his government by 306 votes to 239 in a test of his authority that, despite grumbling from leftist allies that he is too centrist, was never in question given the absolute majority of ruling Socialists in the lower house.
"I am all for respecting our commitments, for budgetary rigour but not for austerity ... I do not want to harm growth, otherwise our deficits won't fall and neither will unemployment," he told parliament before the vote.
"Yes, we must put our public finances right but not destroy our social model or public services - the French people would never accept that," he said, adding: "We will explain that to our European partners."
German and EU officials this week said France should not be granted more time to bring its deficit down from 4.3 percent last year to an EU target of 3 percent in 2015 as promised.
Valls, who earlier on Wednesday told Socialist deputies that further savings might be required in a supplementary budget to pay for the tax cuts, did not spell out whether France would be able to hold its 2015 deficit promise.
Saxo Banque analyst Christopher Dembik said that, based on the figures given by Valls, that target was impossible.
"France will in coming weeks have to negotiate with European partners a new postponement - which, given existing statements out of Brussels and Frankfurt - is not a done deal," he said.
Confirming an expected package of 30 billion euros ($41 billion) in payroll tax cuts on companies by 2016, Valls said the "C3S" revenue tax on companies would be scrapped by the same date, handing a total six billion euros back to business.
A temporary surtax on the main corporation tax would be abolished in 2016 and the standard rate of corporation tax would be cut gradually to 28 percent from 33 percent, he said.
He also announced 5 billion euros of reductions in payroll charges and tax cuts largely aimed at low earners.
"The main thing is to restore the French people's confidence in their future," he said.
Read more of this report from Reuters.