Mini-Budget In France

Press, Volume CVIII, Issue 31729, 12 July 1968, Page 11

Mini-Budget In France

CN.Z.P.A.-Reuter—Copyright) PARIS, July 11. France moved on two fronts today to combat the economic and financial reversals of the recent long industrial relations crisis. The Bank of France announced that it had arranged a SUSI3OOm shortterm credit facility with the country’s four major Common Market partners and with the Bank of International Settlements.

And the Ministry of Economics and Finance disclosed proposals to pass one-third of the costs to the State of the strike concessions on to the public and absorb the equivalent of SNZ4SOm in inflationary spending money through a draft Budget amendment to be presented to the new National Assembly later this month. The main new revenue-

earner will be a surtax affecting France’s 650,000 highest income-tax payers, which is expected to bring in about SNZ236m this year.

Other measures include a 10 per cent alcohol sales tax rise, a 100 per cent increase in registration charges for cars of 7 h.p. and more, and higher stamp duties for official documents. The Government’s miniBudget also includes a new annual corporate tax of SNZ9OO on companies with an issued capital of at least 8NZ27.000 and of «NZ364 on companies with lower capitalisation.

Only the surtax and the car registration tax are temporary measures for 1968. The others are permanent.

The new tax package, which carefully steers away from raising price levels that would affect wage earners or industry, is expected to bring is an extra SNZ4SOm, which should reduce France’s record 1968 Budget deficit to about 8NZ1874. Observers say the new borrowing arrangements underline the Government’s determination to preserve the official parity of the franc and resist devaluation pressures.

As had been anticipated, Mr Maurice Couve de Murvllle. France's Foreign Minister for 10 years, was named today as the new Prime Minister to succeed Mr Georges Pompidou. Three days of mounting speculation had dulled the bombshell effect of the replacement of Mr Pompidou, who had reached a crest of popularity for bls handling of the student unrest and worker strikes in May and June.

No reason was given for the change; President de Gaulle considers it his sole responsibility to appoint Prime Ministers, and he does not bother to explain his actions.

In a letter to Mr Pompidou, the President wrote: “Whereever you will be, know, my dear friend, that I want to keep particularly close relations with you. I wish, finally, that you should hold yourself in readiness to accomplish any mission and take on any mandate which could be given you one day by the nation.” Sources close to the Elysee Palace say this certainly refers to the possibility that Mr Pompidou might one day be called on to succeed President de Gaulle.