The French government has frozen prices of all goods and services until the end of the year.
The French government has frozen prices of all goods and services until the end of the year. The move was announced on Wednesday (22 September) to attack and high rate of inflation which has been crippling the economy.
SYNOPSIS: The new French Prime Minister Raymond Barre made the announcement. He said the French economy had reached a state of serious weakness, and to arrest the slide he was introducing a programme that includes a moderate increase in income taxes for middle and high wage earners, and sharp increases in taxes on petrol, car licenses and alcohol. Cabinet ministers approved the plan in the morning but the nation had to wait till the afternoon to hear the details. The anti-inflation package has already led to in improvement on the French France on world money markets.
Prices in France have been rising at an estimated 12 per cent rate this year. The Prime Minister said this was twice as fast as the inflation rate in leading western nations with which France must compete economically.
The motorist will be hard-hit by the measures. This is because the government regards France's spiralling oil costs as a major factor in economic problems. Petrol goes up by 15 per cent. Annual car tax has also risen sharply. They're now up to 80 pounds sterling (138 U.S. dollars) a year. The tax on alcohol is increased by 10 per cent. M. Barre started working on the plan from the moment President Giscard D'Estaing appointed him premier four weeks ago, with the emergency task of checking inflation and stabilising the French currency.
However several hours after the Prime Minister's announcement there was a noisy demonstration against his plan by women members of the Communist Party.
Their disapproval was echoes by the major trade unions and the left-wing opposition which describe the plan as being a form of electioneering for next year's municipal elections and the general elections in 18 months time. But French industry has given the plan a guarded welcome.