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France Crushes Socialist Welfare Dream, Admits "Living Beyond Its Means" For 40 Years

Facing up to the pressures of responsibility as a member of the European Union - having been told their treaty-busting budget plan was unacceptable - it seems France is resorting to the worst case scenario - cut spending! As Bloomberg reports, the glory days of France’s welfare model may be behind it, as France, which hasn't had a balanced budget since 1974, admits "for 40 years we have lived beyond our means," but French PM Valls is "convinced [France] can make up for lost time." His plan - streamlining unemployment benefits, cutting bonuses for newborns, and pegging family allowances to household income (all of which amount to a de facto re-writing of France’s welfare rules), are being spun positively: "It's not the end of a generous system,” government spokesman Stephane Le Foll said yesterday. "It's the end of spending that wasn't useful - and that's in order to preserve a system that is a costly one."

 

France’s generous welfare system has come at a price - a budget that hasn’t been balanced since 1974 - and as we noted previously, the European taxpayers (read Germans) are not willing to accept it any longer. So, as Bloomberg reports...

The country’s Socialist government led by Prime Minister Manuel Valls is chipping away at a system that dispenses 52 billion euros ($66 billion) annually just in family benefits, and is among the most generous in the world. A hemorrhaging public deficit and debt on track to reach about 100 percent of gross domestic product within two years have left the government with little choice but to attack what in France has been a way of life for almost a century.

 

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“For 40 years we have lived beyond our means,” Valls said this week. “I am convinced we can make up for lost time.”

 

The government sought to defend the move, saying it’s not dismantling the French model, but rather making it more efficient and less wasteful.

 

“It’s not the end of a generous system,” government spokesman Stephane Le Foll said yesterday. “It’s the end of spending that wasn’t useful -- and that’s in order to preserve a system that is a costly one.”

 

Valls has mapped out his plans: streamlining unemployment benefits, cutting bonuses for newborns and pegging family allowances to household income -- all of which amount to a de facto re-writing of France’s welfare rules.

 

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Several pillars of the French welfare model will be pulled down by the changes.

 

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Valls, 52, is not coy about his political ambition and sees the welfare-system reforms as part of his platform.

 

“Like you all, I am preparing for the future,” he said yesterday.

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We wonder how much those 'slightly used' guillotines are going for on eBay now?