France says coming tax hikes on the wealthy to be ‘temporary’

France’s finance minister on Wednesday promised that the tax hikes the government says are required to bring the country’s finances back on track will be targeted at high-income groups and limited in time.

A day after Prime Minister Michel Barnier pledged to tackle France’s “colossal” debt through spending cuts and new taxes, Antoine Armand told the RTL broadcaster that low- and middle-earners would be spared from the extra fiscal burden.

France is looking to improve its financial situation by some 60 billion euros ($66 billion) in 2025 in the hope of bringing the public sector deficit to five percent of gross domestic product (GDP) from an estimated 6.1 percent this year, a government source told AFP on Wednesday.

Some 40 billion of the total are to come from spending cuts, and 20 billion from new revenue.

This projection, the source said, is based on assumed GDP growth of 1.1 percent in 2025, similar to this year’s economic growth rate.

“Once we have managed to cut spending significantly, an exceptional and temporary effort will be required from those with extremely high incomes,” Armand said.

Income tax brackets for “those who go to work every day” would not change, he promised.

“Large and very large companies” will also be asked to pay higher taxes, Armand said, although he ruled out such an extra burden “lasting for several years”.

During his first major policy speech to parliament on Tuesday, Barnier said the government was now aiming to reach the European Union’s deficit limit of three percent of GDP in 2029, two years later than previously planned.

He called France’s debts of over 3.2 trillion euros—more than 110 percent of GDP—”the true sword of Damocles… hanging over the head of France and of every French person”.

The government source said that France’s debt mountain could grow to close to 115 percent of GDP next year, before gradually declining along with annual deficits.

Barnier’s cabinet is to examine the 2025 budget proposal on October 10, and the draft law will then be submitted to parliament.