France''s finance minister promised sweeping tax cuts over the next two years and announced plans to sell shares in three major energy firms and a big roads operator on Tuesday, outlining policy until elections in 2007. "Everything revolves around three words - jobs, growth and confidence," Finance Minister Herve Gaymard told a news conference at which the budget and industry ministers also set out their reform plans.
The ministers repeatedly underlined what is positive in the euro zone''s second biggest economy, such as growth, but ignored strikes and protests that have highlighted widespread discontent with President Jacques Chirac''s centre-right team.
Gaymard said he expected economic growth of around 2.4 percent of gross domestic product in 2004 and about 2.5 percent in 2005, and vowed to bring the public deficit below the European Union limit of 3 percent of GDP this year.
Making clear he plans to raise some of the funds for this through partial privatisations, he announced plans to sell shares in three major energy firms and in roads operator Societe des Autoroutes du Nord de l''Est de la France (SANEF).
"If the conditions are right, we will be able to introduce (gas company) Gaz de France onto the stock exchange by the summer, (nuclear firm) Areva by the end of the summer and (power utility) EDF by the end of the year," Gaymard said.
The government hopes to raise some 20 billion euros ($25.70 billion) overall, including 8-11 billion euros from the partial privatisation of EDF, to help ease pressure on public finances.
But the sales face political and financial hurdles and have been provoking labour unrest for several months, while protests have been spreading against economic reforms, pay and job cuts, and plans to relax the rules on France''s 35-hour working week.
Power workers were staging a 24-hour strike on Tuesday.
The government has made clear it will press on with its reform plans despite the protests, but is also promising tax cuts with an eye on the parliamentary and presidential elections that are due in 2007.
Such cuts are also aimed at meeting an election promise made by Chirac in 2002 to cut income tax by 30 percent.
"We are going to continue this (tax cutting) effort for the benefit of our citizens. I want to increase the government''s options concerning the reduction of income tax in 2006 and 2007," Gaymard said.
Gaymard said he would present Prime Minister Jean-Pierre Raffarin in the coming months with "a range of proposals to the benefit of the middle classes and the active population".
Cuts could be concentrated on reducing the lowest income tax bracket as well as boosting tax offsets for salaried staff''s professional expenses, he said.
Gaymard, a former farms minister appointed by Chirac two months ago to replace the outspoken Nicolas Sarkozy, stood by a 2.5 percent growth target for this year "even if everyone knows the uncertainties linked to the international environment".
Gaymard said unemployment in France, which is close to 10 percent, was "scandalously high" and that reducing joblessness remained a priority.
Raffarin wants to cut the jobless rate to below 9 percent of the workforce this year. Few economists believe that is realistic and Gaymard did not set a target for cutting unemployment, a key priority for voters.
Gaymard said France remained on course to bring its public deficit below 3.0 percent in 2005 - the target set under the EU''s Stability and Growth Pact, which was devised by the founders of the euro to protect the fledgling currency. Gaymard said the government would also pursue its spending freeze in 2006, saying increases will be in line with inflation.
Other measures announced by Gaymard include: the authorisation of interest payments on current accounts; plans to alter rules relating to mortgages; co-operating with credit institutions on developing consumer credit.
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