Citing the legitimacy of the French government and that of the European Union as well as the credibility of France abroad, the French Prime Minister, Manuel Valls, defended Tuesday the biggest cuts in public spending in modern French history.
Mr. Valls made his appeal after the vote that approved the cuts was led by a broken alliance between the National Assembly and the Socialist Party (PS ) of France. Valls pushed through a vote of 265 yeas against 232 nays and 41 abstentions in the ranks of PS.
Although his administration was heavily influenced by Brussels, Valls presented his Stability Triennial Program as an example of “France’s sovereignty” and as an effort to reduce the country’s deficit that was born in Paris.
Valls said that the new package would help to improve business competitiveness, growth, reduce the deficit and ensure “social justice and the purchasing power of the poor.”
“We cannot live longer beyond our means,” proclaimed Valls, who asked vehemently for the symbolic support of the representatives of the Socialist government, who were overwhelmed by internal dissent. Valls asked government and assembly members to be “consistent, to show courage and take their share of responsibility.”
Regarding the recent losses in municipal elections, the prime minister said “It’s not just a vote, but a decisive vote that will profoundly mark the evolution of this country. The result determines both the legitimacy of the government, its ability to govern and, above all, the credibility of France.”
Valls was cheered by the bench at the end of most of his speech. He denied that the snip of 50,000 million in the period between 2014-2017 will be an “austerity plan” and stated that the priority remains investing in education and creating youth employment.
Valls added that the drop in 30,000 million of tax and labor burdens on companies “should serve” to create jobs, but he did not specify how much, when and how. He said that it would not “increase dividends and salaries of managers” – and encouraged unions and the “people’s representatives” to monitor the employers meet their commitments.
The prime minister sought to give a coat of positivism to the neoliberal policies embraced by François Hollande in January when he announced massive spending cuts while offering employers unions a covenant of responsibility.
“The wealth is created by businesses and jobs, too,” Valls said, recalling that France has lost tens of thousands of jobs in recent years. Today 3.6 billion people do not engage in any activity – and it is necessary to “reduce the competitive disadvantage between France and Germany.”
“The drop in labor costs will intensify. Zero charges for workers earning the minimum wage from January 1, 2015 is an important incentive for entrepreneurs ,”said Valls , who acknowledged that the pact has generated “doubts” among political groups, including the socialist, but he said that the fiscal adjustment “is just, well distributed , and it is not hard nor soft, but calibrated to ensure economic recovery.”
Valls then promised that Hollande will require that Brussels provides new monetary and investment policies to stimulate employment and “reduce the high price of the euro” and justified the measures with some real issues: “40 years ago we spent over what we produced. Debt costs us 45,000 million per year. We have changed to take the measures that were needed.”
“France is a great country,” said Valls, resorting to the infallible words of grandeur. “But it must ensure its financial independence and sovereignty, ie, not neing dependent on financial markets and not put the burden of the debt on future generations.” France now pays about 2 % for financing its sovereign debt, the lowest number in decades, but drags public debt equivalent to 96 % of GDP.
“In these years we are collectively depleted, and the French can no take more tax increases, “also said the former Minister of the Interior, who avoided reminding the audience that the measures adopted require a tax increase worth 10,000 million euros for taxpayers who pay income tax.
The stability program undertaken by the Government will reduce France’s spending by 18.000 million and by 11.000 million in other expenses. In addition, it will cut 10,000 million and 11,000 million in health and other benefits.
The cuts will play their role in the next two and a half years for 6.6 million public employees and nearly 15 million pensioners. Salaries aid by the State will be frozen for a year. Salaries of officials – frozen since 2010 -, pensions and family allowances and housing will only be raised on October 1, 2015, which will save 2,000 million euros, or 4.000 million if the social dialogue can also freeze supplementary pensions.
Valls said that the government will create 30,000 additional jobs in education, as planned, and others whose figure is not clear in the police and justice, while the number of employees in all other ministries will continue to decline.