The budget is mostly formed of tax rises rather than spending cuts.
A 75% tax rate is to be imposed on annual income above 1mn Euros, which has met with protests from France’s business community.
The rate, however, will be reduced after two years, said Mr. Hollande.
“With constant incomes, nine out of 10 French taxpayers will not be affected by the tax increases,” said French Prime Minister Jean-Marc Ayrault. In other words, these new measures spare the middle and working classes.
The announcement of the new budget comes as figures show France’s economy in a wobbly condition, with unemployment rising beyond 3mn-the highest since France joined the Eurozone.
The economic growth rate has been zero for France for the past 3 consecutive years, and France has to meet its target to get its deficit to under 3% of GDP.