July 17 (Bloomberg) -- President Francois Hollande’s government will today set out 3 billion euros ($3.9 billion) in spending cuts and close tax loopholes as he struggles to revive a stalled economy and his own slumping popularity.
The savings are part of Hollande’s MAP program to modernize government services and range from trimming consular services to eliminating special low-tax rates on diesel fuel for farmers and fisherman, according to a presentation to journalists by officials yesterday.
For Hollande, cutting state spending is a priority as he seeks to reduce France’s budget deficit after he and his predecessor Nicolas Sarkozy increased taxes by 70 billion euros over three years, helping to choke off growth in Europe’s second-largest economy. Business leaders including Total Chief Executive Christophe de Margerie this month urged the government to shrink itself to give businesses room to grow.
“I’ll only increase taxes if it’s unavoidable,” Hollande said July 14 of next year’s budget. “Ideally, increases will be as little as possible.”
Hollande has promised France’s European partners that his government will reduce its deficit to less than 3 percent of gross domestic product by 2015 under the region’s budget pact.
For Hollande, the attempted shrinking of government spending comes at a time when his popularity is at a record low.
About 31 percent of voters have a “good opinion” of the Socialist president, down from 61 percent just after his election a year ago and from 35 percent in May, according to a BVA poll published June 24.
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