France's Austerity Plan Analytical Essay by Carly Evans

An overview of France's recent austerity plan, the measures introduced, the reasons they were introduced, and the public reaction to the plan.
# 150765 | 1,602 words | 5 sources | MLA | 2012 | US
Published by on Apr 11, 2012 in Economics (International)

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In the fourth quarter of 2011, French Prime Minister Francois Fillon revealed the details of France's austerity plan. This paper explores the reasons why the plan was instituted. For example, the measures were meant to counteract weak economic growth that failed to meet predicted levels, and which caused Moody's Investors Service to threaten a downgrade of France's bond rating. The paper explains that such a downgrade would negatively impact France's ability to borrow money and increase its cost of debt, another important impetus behind the austerity measures. The paper then discusses France's present economic situation, and then outlines many of the plan's measures, such as increasing VATs, trimming the budget, and instituting a raised retirement ceiling. The paper then discusses public reaction to the plan, which has been largely negative. It also discusses the objections to the plan raised by opponents of the current French government, and by some segments of the business community who fear their bottom lines will suffer under the new measures.

Reasons for the Austerity Plan
France's Current Economic Situation
Outline of the Plan
Reaction to the Plan

From the Paper:

"Since November 2011, when French officials announced the latest austerity plan, the French government has instituted a variety of tax hikes and cost-cutting measures designed to head off a threat by Moody's to downgrade France's bond rating. Intended to deal with the slower-than-predicted economic growth that occurred during the last several quarters, the austerity plan is expected to save 65 billion euros (or nearly 90 billion dollars) by the end of 2016. The measures include increased value added taxes, budget cuts, and even an accelerated plan to raise the retirement age from 60 to 62.
But due to the severity of the measures, a variety of voices have risen in complaint against the plan. At the forefront are the Socialist party, who seek to supplant President Nicolas Sarkozy in his bid for the Presidency, and representatives of the French bookseller industry, who fear the increased VAT on their merchandise will strip them of any opportunity for profit."

Sample of Sources Used:

  • Chaplain-Riou, Myriam. ``Austerity tax could 'kill off' French bookstores.'' (April 6, 2012) : Web. 6 Apr. 2012.
  • Clark, Nicola. ``Government of France Proposes Austerity Cuts.'' New York Times. (November 7, 2011) : Web. 6 Apr. 2012.
  • ``France reveals further budget savings.'' BBC. (November 7, 2011) : Web. 8 Apr. 2012.
  • Horobin, William. ``France Announces New Austerity Plan.'' Wall Street Journal. (November 8, 2011) : Web. 6 Apr. 2012.
  • Marliire, Phillipe. ``Nicolas Sarkozy's 'blood, sweat and tears' austerity plan may backfire.'' The Guardian. (November 7, 2011). Web. 6 Apr. 2012.

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