Sep 30, 7:16 AM EDT

France to cut taxes for 11 billion euros ($12.3 billion) to drive economy forward

AP Photo
AP Photo/Michel Euler

Buy AP Photo Reprints
A district summary of the Beige Book
Measuring economic stress by county nationwide
Mall malaise: shoppers browse, but don't buy
Unemployment by the numbers
Family struggles with father's unemployment
Saying an affordable goodbye
Hard times hit small car dealer
Latest Economic News
New York comptroller: Wall Street profits hit $11.3 billion in first half of 2015; jobs added

IMF expects world economy to register slowest growth since 2009, sees risk in emerging markets

German factory orders down 2nd straight month in August, led by lower demand outside eurozone

US services sector expands at slower pace in September as sales, new orders weaken

World Bank trims East Asia growth forecasts on risks from China slowdown, US rate increase

Job growth in retail and professional services accelerated in September, bucking overall trend

Unemployment rates improve for high school grads and inch up for recent vets

Cautious businesses pull back on hiring as depressed global growth finally catches up with US

How to dissect the jobs report: Apart from low unemployment, just how healthy is labor market?

US manufacturing barely expands in September as global growth weakens, oil drillers cut back

Greece's Debt Threatens to Spread
State budget
gaps map
Auto industry problems trickle down, punish Tennessee county
Women give old Derby hats a makeover in tough economy
S.C. town deals with highest unemployment in South
How mortgages were bundled and sold as securities
Tracking the $700 billion financial bailout
Tracking the year's job losses
State-by-state foreclosures since 2007
Credit crisis explained
Presidents and their economic legacies
Lexicon of the financial crisis
Americans' addiction to debt
Latest News
Paris police crack down on pickpocketing of tourists in public transit, department stores

Nasty Air France labor fight drags in French leaders after images of shirtless execs spread

Picturesque French Riviera hit by flash floods: 16 dead, pilgrims trapped, roads blocked

From nudity to origami, VIP-filled Paris Fashion Week has it all

Turkish president: Turkey taught world 'lesson in humanity' by hosting 2 million refugees

PARIS (AP) -- The French government will cut taxes for a total of 11 billion euros ($12.3 billion) next year, according to budget plans that aim to loosen up an economy burdened with high unemployment and weak growth.

The budget detailed Wednesday in a Cabinet meeting is the first under President Francois Hollande to meet the government's deficit targets.

The government plans 9 billion euros in corporate tax breaks to boost hiring and investment. The amount is part of a 40 billion euros plan staggered from 2014 to 2017 to support French business. Income taxes will be cut by 2 billion euros.

The budget is a "confirmation" that the government intends to "put public finances in order", the government spokesman Stephane Le Foll said Wednesday.

France is trying to bring the deficit within the EU limit of 3 percent of gross domestic product by 2017. The 2016 budget estimates a deficit of 3.3 percent next year, down from 3.8 percent this year.

Since Hollande's election in 2012, EU authorities have allowed France to twice delay the date by which it would bring its deficit within the EU target.

This month, Moody's Investor Service downgraded the credit rating of France from Aa1 to Aa2, its third-highest possible rating. The ratings agency explained that "French economic growth will remain low over the medium term," which will make it harder to heal public finances.

The budget plans are based on expectations that the economy, the second-largest in the 19-country eurozone, will grow by 1.5 percent next year, up from about 1 percent this year.

© 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.