Aug. 25 - The French government's deficit-cutting plan receives an angry response from some, while in Germany, consumers rein in their spending over euro zone fears. Kirsty Basset reports.
The French public and opposition have criticised a government plan to save 12 billion euros, as France tries to reduce its public deficit. The Socialist opposition says that while debt reduction is needed, the proposed measures hit those who can least afford it, a sentiment echoed on the streets of Paris. (SOUNDBITE) (French) PARISIAN EDOUARD BAJOUR SAYING: "It's always been the poor who pay more than the rich. Quite simply because proportionally the poor have less money, so we the poor with our small incomes, we are more affected by this taxation, I think the rich won't notice it as much because proportionally, they have got more leeway, and us, we don't really." That's despite the fact that top earners will be hit with higher taxes, as politicians try to win over angry voters ahead of next year's election. But the bulk of the savings will come from getting rid of tax exemptions on everything from private health insurance to real estate capital gains and value-added tax on theme park tickets. There was a sense of urgency to find further savings earlier this month, when French banking stocks took huge hits from rumours that France might lose its prized AAA credit rating. City Index analyst, Joshua Raymond. (SOUNDBITE)(English) CITY INDEX ANALYST JOSHUA RAYMOND SAYING: "At the moment what you can see is that they've escalated their attempts to cut their deficit, they're speeding their measures through. And I think the positive sign of this is that this is coming about despite the fact that Sarkozy's going to be up for re-election soon. So the fact of the matter is they don't seem to be playing politics on this one and they really are trying to get their deficit under control to meet the 3 per cent target for the euro zone nations." Meanwhile in Germany, consumer sentiment hit a 10 month low going into September due to the ongoing euro zone debt crisis and fears of another recession in Europe and the U.S. It's the third month in a row the forward looking index has slipped, and is adding to signs that Europe's largest economy is slowing. The GfK research survey also found that German consumers are worried about the stability of the euro, and are buying goods that will keep their value, rather than saving for a rainy day. Kirsty Basset, Reuters.