France to unveil tax-heavy budget
on 28/09/2012 10:06:51
Other countries in Europe are implementing harsh austerity, but France has largely held off on slashing its budget. Instead, it is expected to mostly to announce a raft of new taxes.
The measures are designed to reduce the government's deficit by €30bn, with only a third of that in spending cuts.
Economists say raising taxes will only make it more important for Mr Hollande to get serious about loosening the country's hidebound labour market.
Meanwhile Slovenia's prime minister insisted that the Alpine nation did not need a bailout from the European Union, despite a crippling banking crisis that has unnerved investors and caused political gridlock.
Speaking on the sidelines of the annual gathering of world leaders at the United Nations, Janez Jansa said Slovenia could overcome the threat of bankruptcy on its own by quickly passing banking reform legislation and spending €3-4bn buying bad debt from state-owned banks.
Mr Jansa said his government was "determined to do everything that's possible" to prevent the need to ask for foreign assistance.
"We don't need money from the European stability mechanism," he said. "Of course we need structural reforms which were neglected during the past."
Once the richest of the six former Yugoslav republics, the Eurozone nation has been hit with a severe recession. Slovenia's property bubble burst after the 2008 global financial meltdown, much like Spain, which is under pressure to seek a rescue package.
Slovenia's debt-to-GDP ratio is under 60%, Mr Jansa said. By comparison, Spain's debt ratio is to 75.9%, according to figures published this month by the Bank of Spain.
Mr Jansa said his government wanted to start buying up bad debt from banks by the end of the year. Slovenia also plans to sell bonds later this year.
Parliament "is starting to take all necessary measures to pull Slovenia from dangerous water", he said.
"We have to stabilise our banking system. This is the most important short-term measure."
Along with an overheated construction sector, Jansa blamed the crisis on the reluctance of past governments to privatise banks after Slovenia broke away from Yugoslavia.
He also said the severity Europe's financial crisis was underestimated, which only prolonged the political stalemate in Slovenia, when the previous government should have been acting quickly to enact reforms.
Along with continuing to reduce its budget deficit, Mr Jansa said Slovenia must past pension and workplace reform to "send appropriate signals to financial markets".