Valls denies pay, benefit freeze are austerity package

French Prime Minister Manuel Valls has denied that his freeze on benefits and public-sector pay are an "austerity package" but he faces criticism from the left of his party.

Manuel Valls announces his economic package with his ministers standing by Reuters/Philippe Wojazer

The measures mark a "new stage" for President François Hollande's government but they are not an "austerity package", Valls told France 2 TV on Wednesday.

Earlier he was forced to promise to discuss the plan with Socialist MPs amid rumblings of discontent over the packages contents and the fact that the prime minister announced it to the media before facing his own party's parliamentary representatives.

Left-wing Socialist Christian Paul threatened rebellion in the ranks if no changes are made to the package.

"We were not elected to organise a reduction in the spending power of pensioners, civil servants and workers who depend on social benefits," he said.

The new government won a vote of confidence with all Socialist MPs backing it last week.

The Socialist Party's new national secretary, Christophe Cambadélis promised that the parliamentary group would discuss the package but insisted that they must vote for it.

"You don't add crisis to a crisis," he said.

Criticism was even more blunt on the hard left.

"Valls is acting like Brussels's bailiff," said former presidential candidate and Left Front leader Jean-Luc Mélenchon.

His anti-EU tone was echoed on the far right.

"Millions of French people are going to suffer a collapse of their living standards because the government insists on obeying the EU on the euro," was the comment of Florian Philippot, vice-president of the Front National.

"That's no way to cut the deficit," exclaimed mainstream right-wing leader Jean-François Copé on Thursday.

The French economic model needs reforming along with the pension system, the UMP chief said, adding that social security spending should be cut and the 35-hour work week should be scrapped in the public sector.

More than 40 per cent of the savings envisaged - 21 billion euros - will come from cuts in social benefits and health care.

Another 18 billion euros is to be trimmed from government ministries and the remaining 11 billion will come from a rationalisation of local government, according to Valls.

Public spending currently accounts for 57 per cent of GDP and the national debt has risen from 50 per cent of annual output in 2002 to 93.5 per cent at the end of last year.

"We cannot afford to live beyond our means," Valls said. "And we have to break with this logic of debt, which is stealthily and gradually tying our hands. We have to reclaim our sovereignty."