The new head of France’s largest employers’ federation has warned that the country faces the “mother of all battles” to cut public spending and urged President Emmanuel Macron to accelerate process to kick-start the economy, reports the Financial Times.
“We’ve been living on heavy public spending for years and it’s a very addictive drug,” Geoffroy Roux de Bézieux, who took over as Medef president in July, told the Financial Times in an interview.
“Like any drug you have to separate from [it] slowly, but the first year [of Macron’s presidency] has been not enough. We need to accelerate that pace.” At 56.4 per cent of GDP, France’s public spending is the highest in the EU.
During his election campaign, Mr Macron promised to slash the level to 52 per cent by 2022, while cutting France’s budget deficit to below the EU’s 3 per cent target and slashing unemployment.
Mr Macron has pledged €60bn of savings over five years but so far has gone easy on public spending cuts — which would mean taking on the powerful civil service unions, which represent a fifth of the workforce.
Mr Roux de Bézieux welcomed the pro-business measures enacted during Mr Macron’s first year, pointing to an overhaul of France’s wealth tax, introduction of a flat tax on dividends and reform of the sclerotic labour market, including a cap on damages that courts can award for unfair dismissal.
But he warned that further tax cuts were not possible without reducing spending.