Socialists lose round two of France's budget tussle

France’s highest court, the Constitutional Council, has approved the main points of the 2012 budget, which was rejected by the Socialist-dominated French Senate last week.

Ảnh minh họa. Caspar Benson

The Constitutional Council approved the main parts of the 2012 budget and the revised 2011 budget on Wednesday

Opposition Socialist lawmakers last week asked the council to look into the constitutionality of several measures of the budget, notably one that would raise the reduced VAT tax from 5.5 per cent to 7.0 per cent.

They said that measure violated the constitutional principle of equality. The council disagreed.

It also approved 2012 budget’s proposed tax on fizzy drinks, another measure contested by the Socialists.

The Constitutional Council’s approval paves the way for a compromise budget that both houses can agree on.

The bill incorporates fiscal measures announced by Prime Minister François Fillon and includes targeted tax hikes and spending cuts.

The government says the budgets are part of a plan to reign in the public deficit to 5.7 per cent of GDP this year, to reach the European-Union-mandated three per cent by 2013.

The deficit was reduced by 3.6 billion euros in the third quarter of 2011, figures published Wednesday showed, bringing it to 1,688.9 billion euros, 85.3 per cent of GDP.