28 September 2012
Last updated at 06:44 ET
The prime minister said the budget was part of a war against growing debt
French Prime Minister Jean-Marc Ayrault has said that nine out of 10 citizens will not see their income taxes rise in the new budget.
He has confirmed that there is to be a new 75% tax rate for people earning more than 1m euros (£800,000; $1.3m) a year.
He has not yet detailed how much taxes will rise for the rest of the top 10%.
It is one of the key policies in what he called “a courageous, responsible budget – a budget of conquest”.
The government’s priorities were young people, training and cutting 10bn euros from its spending, he said. This would demand an effort but would be fair, he added.
Ambitious targets
Official figures on Friday showed that French public debt had hit 91% of GDP between April and June this year.
It was 89.3% at the end of March, which was still well above the eurozone limit of 60%.
Mr Ayrault pointed out that debt had grown by 30% of GDP in the past five years and that the debt threatened future generations.
He also said that the budget would encourage small and medium businesses and that taking risks would also be encouraged.
In its first budget, the Socialist government repeated its promise to cut the annual deficit to the eurozone limit of 3% of GDP next year.
The deficit this year is expected to be 83.6bn euros, which is 4.5% of GDP.
Mr Ayrault said that France was strong when it set itself ambitious targets.
Source Article from http://www.bbc.co.uk/news/world-europe-19754016#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
France to raise taxes on top 10%
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