top cx logo
cx logo
Explorearrow down
search icon
arrow down

Valls cuts €21bn from welfare bill

France's Prime Minister freezes public sector pay and takes axe to pensions, social care and health care bill

PRIME Minister Manuel Valls today revealed how €21bn will be cut from France’s pensions, social care and health care bill over the next three years.

The cuts form a large part of the savings demanded by the country’s so-called €50bn “Responsibility Pact”.

He said that the government plans to slice €10bn from the cost of health care and €11bn from pensions and social care by 2017 - but he vowed to maintain benefits for those with the lowest incomes, and said the minimum wage would not drop from its current €9.43/hr level.

Family benefits, however, will be frozen until October 2015. This measure alone is expected to save the government between €2bn and €4bn.

Meanwhile, central government will have its spending cut by €18bn, while local councils will face cuts of €10bn.

Mr Valls took the unusual step of addressing the press after the Wednesday meeting of the Council of Ministers, a job usually reserved for a government spokesman.

He risked the wrath of France’s 5.2 million public servants when he said that public sector pay would be frozen for another year and that government agencies would be streamlined.

Public sector pay has not increased since 2010, and despite an earlier warning from the leader of the CFDT union Laurent Berger, Mr Valls said: “I know what we owe to our employees, however the situation forces us: we confirm the freezing of the index.”

He warned that staffing reductions may be necessary, but said that police, justice and education would be spared from the reductions.

Mr Valls insisted: “These efforts will be fair because they will be collective … and equally shared.”

According to a study by the National Institute of Statistics and Economic Studies (INSEE) published today, public sector workers experienced a decline in their average net wage in 2012, taking account of inflation.

The plan also expects to make savings by lowering subsidies to local government. Mr Valls added that he intended local bureaucracy to become “simpler, easier, more effective and less costly”.

Public spending in France accounts for about 57% of the country’s gross domestic product, one of the highest levels in the world.

Resident or second-home owner in France?
Benefit from our daily digest of headlines and how-to's to help you make the most of life in France
By joining the newsletter, you agree to our Terms & Conditions and Privacy Policy
See more popular articles
The Connexion Help Guides
featured helpguide
Healthcare in France*
Featured Help Guide
- Understand the French healthcare system, how you access it and how you are reimbursed - Useful if you are new to the French healthcare system or want a more in-depth understanding - Reader question and answer section Aimed at non-French nationals living here, the guide gives an overview of what you are (and are not) covered for. There is also information for second-home owners and regular visitors.
Get news, views and information from France
You have 2 free subscriber articles left
Subscribe now to read unlimited articles and exclusive content
Already a subscriber? Log in now