French Prime Minister Unveils Budget Cuts Plan

French Prime Minister Manuel Valls unveiled Wednesday a detailed plan of budget cuts worth about 50 billion euros for 2015 to 2017 as part of the country's European commitment known as the "Responsibility Pact."



The Responsibility Pact includes 50 billion euros worth of cuts to health care, local government and family subsidies to take place over the next three years to finance tax breaks for businesses looking to employ more staff. 



The newly appointed prime minister revealed that 40 percent, or approximately 21 billion euros, of the cuts will come from the social benefits and healthcare systems. Yet stated that families with poor incomes will not be affected.



Another 18 billion euros is to be trimmed from the budgets of government ministries and the remaining 11 billion euros will come from the streamlining of local government.



Valls also reassured MPs that he had no plans to change France's minimum wage, the highest in Europe at 9.43 euros per hour.



"Our public spending represents 57 percent of our national wealth. We can't live beyond our means," Valls said in his speech to the French Assembly after the weekly Cabinet meeting with President François Hollande.



The announcement has already shocked members of Valls' own Socialist Party who are threatening to vote against it when it goes through the parliament.



Giving his first policy speech last week, Valls promised tax cuts to employers and low-paid workers by boosting their salaries by around 500 euros per year through cutting social-security contributions and labor costs by 30 billion euros as part of the responsibility pact.



Valls was appointed prime minister on March 31 in a government reshuffle following the ruling Socialists' poor performance in local elections on March 30.



The French Assembly will vote on this plan April 30 and is due to present it to the EU council in Brussels in early May.



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