Sarkozy Moves To Protect Triple-A Rating

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The French Government is to unveil a set of austerity measures today as part of efforts to protect the country’s top triple-A credit rating.

President Nicolas Sarkozy is to meet with Prime Minister Francois Fillon and Finance Minister Francois Baroin today to discuss the 2012 budget.

According to the Wall Street Journal, France wants to sure up market confidence as the eurozone continues to suffer through a debt crisis.

Officials have said the measures will include increased taxes for the highest-income earners. There will also be some budget cuts outlined today by Fillon.

Yesterday, some of the country’s wealthiest individuals called for such a tax in the name of national solidarity, reported the Financial Times. The tax will reportedly be introduced on those who earn over €900,000 (~ $1,296,900).

Other measures will include a reversal of some tax breaks in overtime work and a tightening on loopholes that have been in place for investors in overseas territories and real estate. Overall, the Government hopes to cut about €10 billion from the budget next year.

Bloomberg reports that the chief of the ruling party, Jean-Francois Cope, said yesterday the budget for next year would reflect “austerity” – a word that Sarkozy has previously avoided.

However, the President now needs to show that France is prepared to balance its budget. The country aims to cut its public deficit to 5.7 per cent this year and 4.6 per cent next year.

According to Bloomberg, France now pays a premium of 66 basis points over Germany to borrow for 10 years.

This post originally appeared on Business ETC.