- POSTED: 16 Jan 2014 19:52
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French President Francois Hollande's proposals to cut spending and taxes must be applied urgently and can help save or create at least one million jobs, the head of the country's central bank said on Thursday.
PARIS: French President Francois Hollande's proposals to cut spending and taxes must be applied urgently and can help save or create at least one million jobs, the head of the country's central bank said on Thursday.
Christian Noyer welcomed the direction of the changes announced by Hollande but said they had to be applied without delay.
Hollande announced on Tuesday 50 billion euros ($68 billion) in spending cuts between 2015 and 2017, and a 30-billion-euro reduction in corporate payroll charges, but said companies in return must create more jobs.
The cut in payroll charges would be brought about by scrapping the so-called family contributions paid by companies and independent workers. In France, the welfare budgets are financed largely by charges on employers and their staff.
"If these decisions are implemented quickly, there will be investments, there will be recruitment," Noyer said on Europe 1 radio. "We will see it right from this year."
"It's the right path... and one must proceed quickly as there is a pressing need," Noyer said, adding that it would help create or save "at least one million jobs".
Hollande, whose popularity has plummeted to record lows, is under intense pressure to revitalise the French economy and reduce near record unemployment.
Noyer, who as governor of the Bank of France is also on the policy making body of the European Central Bank, said the reforms should not be seen as a "gift" to employers but "opportunities given to the jobless and future employees".
He said however that "the double priority is to improve the competitiveness of companies... and reduce the deficit to balance public finances".
Hollande's plan has got a guarded response from French companies who are anxious to hear more details of exactly what he is proposing.