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Hollande lays out plans for taxes and growth

President Francois Hollande has set a two-year deadline to help balance the French budget with higher taxes targeting the wealthy and cuts in public spending. His political foes say his plan is unfeasible.

In a wide-ranging interview with the TF1 television station, Hollande laid out his plans for the economy and rising unemployment. He also didn't let France's richest man, LVMH boss Bernard Arnault, off the hook for his plans to seek Belgian nationality.

"He must weigh up what it means to seek another nationality because we are proud to be French," Hollande said.

The Socialist Hollande also acknowledged the current unemployment figure of about three million and said he hopes to turn that around within the year.

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The billionaire Arnault is moving to Belgium

He intends to do that without increasing government outlays, saying that 2013's budget would be the tightest in 30 years.

"We will not spend one euro more in 2013 than what we did in 2012," Hollande said.

Hollande cut France's growth forecast for 2013 from the projected 1.2 per cent to 0.8 percent and said 2012's number would be closer to 0 percent than the originally expected 0.3 percent.

He hopes to make up most of the 30 billion euros ($39 billion) needed to reduce the deficit to 3 percent through tax increases and add 10 billion euros to that by not increasing spending.

Opposition dismisses plan

Hollande's plan had been dismissed as unfeasible by the right-wing UMP party of former president Nicolas Sarkozy.

"I am very worried for France," said Jean-Francois Cope, who succeeded Sarkozy as de facto leader of France's center-right.

"I was the budget minister for three years and I have retained one lesson -- that is, to reduce the deficit, one starts with cutting public spending and not by raising taxes," Cope said.

Far-left leader Jean-Luc Melenchon said France, reeling under 10 percent unemployment, was headed for doom.

"Thirty billion euros withdrawn from economic circulation in France -- that necessarily, inevitably, absolutely spells collapse," Melenchon said.

"The country will enter recession, the deficits will widen and unemployment will increase."

mkg, ipj/mz, slk (AFP, dpa, Reuters)

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