Finance

France targets welfare for big spending cuts

PARIS (AP) — France's new prime minister announced plans Wednesday to cut 21 billion euros ($29 billion) from state pensions, health care and the social safety net as a part of a 50 billion-euro effort to rein in the country's debt and deficit.

Manuel Valls said his top priority is curbing France's government spending, which is among the highest in the world at 57 percent of the country's gross domestic product. But he vowed his Socialist-led government will maintain benefits for those with the lowest incomes.

The plan is aimed to help France meet European Union deficit targets, boost its lackluster economy and bring down an employment rate now around 11 percent. "We cannot live beyond our means," Valls said after a Cabinet meeting.

Under the plan, the central government will trim 18 billion euros and local governments another 10 billion euros. The announcement adds details to the commitment made earlier this year by President Francois Hollande, a fellow Socialist, to cut 50 billion euros in state spending, or about 4 percent of the total. It is the biggest state spending reduction in France in half a century.

The planned cuts will slim down the state workforce — though Valls didn't specify numbers — and temporarily freeze pensions for retired state employees. It will also cut spending on elderly care and freeze family benefits, such as government aid for nursery school fees.

Savings in health care costs are to come largely through increased reliance on generic drugs and outpatient surgery. Many French have worried that Hollande's plan would come down hard on health care, and some grumbling was already breaking out in Socialist circles. Meanwhile, the government has pledged some 30 billion in tax cuts — a traditional tool of the political right — to partly offset the impact on family pocketbooks.

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