Readies Tax Breaks After French Vote Losses: Government Source
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[March 26, 2014]
PARIS (Reuters) — The French
government is preparing tax breaks for households after a final round of
local elections on Sunday in which President Francois Hollande's
Socialist party has suffered losses, a government source said.
Voters already punished Socialist candidates in the first round of
town hall votes last Sunday. Marine Le Pen's far-right National
Front made gains, winning a former left-wing bastion and positioning
itself for more victories in the run-offs.
"We are still in a preparatory phase, but there should be (tax)
measures for households in the final package," a government source
said, referring to a 2014-2015 budget plan.
The prospects of tax breaks will raise new questions over whether
France can fulfill a promise of bringing its public deficit down
below an EU target of three percent of output from a forecast 3.6
percent this year.
Hollande's government will around mid-April submit a new
deficit-reduction plan to the European Commission, which is in
charge of policing members' efforts to meet EU deficit rules.
Taxes rose during Hollande's first 22 months in power as he sought
to shrink the deficit, helping to drag his approval scores to record
lows while frustration grew over his failure to bring down
unemployment above 10 percent.
With turnout at a record low, Socialist candidates won just 38
percent of the national vote in the election at the weekend, behind
47 percent for the opposition conservatives.
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In response to his party's poor showing the president said that he
was ready to "act" in April and would consider changing tax policy,
a source close to the president said, amid growing talk of a cabinet
(Reporting by Julien Ponthus; writing by Nicholas Vinocur; editing
by Mark John)
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