8 ♦ NATIONAL NEWS
www.thebugle.eu ○ THE BUGLE ○ NOVEMBER 2014
France challenges EU over budget >> continued from pg 1 what we announced last spring.” The European Commission says it is waiting for France to formally submit its 2015 plan before it makes a decision on whether to ask for revisions. Prime Minister Manual Valls insists that France will stick to its budget plans and the stand-off is fast becoming a test of the Commission’s new powers. The situation is made more complicated by the fact that its economic affairs commissioner, who will ultimately decide whether to throw out France’s budget, is the former finance minister, Pierre Moscovici. When Moscovici was appointed to this role, his opponents on the right claimed he would be soft on his homeland, but he insisted that he would hold all member
states, including France, to the same standards on public spending targets. Major changes in the budget are a 2 cent rise on diesel, a large increase in the cost of stamps and reduced parental leave following the birth of a child. The price of a TV licence will also rise by €3 to €136. The 2 cent rise in diesel will be added to a 2 cent increase previously agreed last year, meaning that a litre of diesel will cost 4 cents more from the 1st January. The diesel price rise has also been passed on to lorry drivers following their recent victory in the ongoing battle with the government over the écotaxe (see below). As France’s postal service struggles to cope with the drop in the amount of post it delivers, La Poste has implemented its largest ever price rises. The
cost of a 20g timbre rouge, the equivalent of a first class stamp in the UK, will rise by 15%, going from 66 cents to 76 cents. Those of us regularly sending post across the Channel will also notice the difference from January when the standard 83 cent stamp to Europe will rise in price by 14% to 96 cents. The sweeping changes to France’s income tax rules, featured in last month’s edition of The Bugle, have also been confirmed. By removing the 5.5% tax band that applies to income between €6,011 - €11,991, as many as 9 million households will pay less tax, with 3 million of those paying none at all in 2015. The move will cost the government an estimated €3.2 billion, but is seen as vital to head off challenges from the within the left wing of the ruling Socialist Party. ■
Ecotax scrapped... again
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Ecology Minister Ségolène Royal A final blow to the government's coffers came with the news that the scrapping of the planned taxes will result in an €800 million compensation payout to Ecomouv', the consortium that had been given the contract to collect the new tax. ■
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Major child benefit changes announced
One of the pillars of the French welfare system has always been universal child benefits: if you have 2 or more children, then you receive a fixed child benefit payment each month, whether you are the president or a plumber. This is all now set to change following the government's announcement that child benefit payments will be linked to income from July 2015. For households earning more than €6,000 per month the benefit payment will be halved and for those earning more than €8,000 the payment will be a quarter of the base figure. Government figures suggest that the changes could save €400 million in 2015, rising to €800 million in 2016 and each subsequent year. Despite these large savings, and the fact that only 13% of the wealthiest households would be affected, the fundamental changes to the child support system have come under widespread attack. François Fondard, president of the Union nationale des associations familiales (Unaf), said: “The principle of universality was already fragile. This reform signs its death certificate and transforms our family and social politics.” “It’s a measure of social justice,” said MP Marie-Françoise Clergeau, who is leading the family section of the 2015 budget, speaking to Les Echos. “We are letting families with modest means and middle incomes hold on to their spending power.” The MP went on to argue that the principle of universality had not been compromised, as “all families will [still] receive benefits”. ■
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rance's HGV drivers have scored yet another victory over the government after Ecology Minister Ségolène Royal announced that the planned péage de transit poids-lourds would be scrapped. This tax was itself a watered down version of the original écotaxe proposals that were scrapped following violent protests last year in Brittany. The latest version of the ecotax was to be applied to lorries weighing more than 3.5 tonnes on 4,000km of the country's road network - a significant decrease on the 15,000km proposed as part of the original ecotax - with the money raised earmarked to maintain roads and divert lorries from urban areas. Transport unions had said the planned GPS system that would be used to track the distances travelled by a lorry was costly and that implementing the tax would cost companies an extra 10% a year. Drivers had been planning a series of roadblocks across the country in protest. Whilst drivers' unions were celebrating their latest victory, the scrapping of the tax was slammed by the national secretary of the Europe Ecologie Les Verts (EELV) party, Emmanuelle Cosse, who told i-Télé: “I am scandalised that in this country, just as a new law on greener energy is being discussed, we are not capable of having measures strong enough to fight against air pollution and other matters when it comes to road use.” Ségolène Royal later said that the government would now seek to recoup the €320 million that the tax would have raised through new taxes on motorway toll companies. France's official competition watchdog recently judged that the 20-24 per cent return on investment being offered by these companies was excessive. However, Finance Minister Michel Sapin warned that taxing the toll companies would ultimately lead to either a rise in the price of tolls, or a lengthening of the time they are allowed to operate.
Finance Minister Michel Sapin
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