French presidential candidate François Fillon, 62, is still proposing an increase in VAT, despite reports on Monday that he was about to renounce the idea. The centre-right candidate of Les Republicains wants to increase the standard rate from 20 to 22 percent, and the intermediate rate from 10 to 12 percent, in order to raise €16 billion into state coffers.
However, he has come in for harsh criticism from opponents of the move, who claim that an increase in VAT would carry significant risk for the purchasing power of the French consumer. A former Minister of Economy, François Baroin, said that an increase in VAT rates would impact all sectors of the economy.
The French economy has shown signs of life in recent months, with the unemployment rate falling to 9.7 percent in the last three months of 2016, down by one percent from the third quarter. However, the consensus among economists is that the prospects for the French economy remain fragile.
Mr Fillon, who recently made headlines for hiring his wife as a parliamentary aide over 15 years with an average monthly salary of €3,700 after tax – “fair for a woman with training in law” he said – has also been criticised for his American-style healthcare plans, which would limit France’s generous public health insurance to serious or long-term illnesses, with everything else requiring private insurance.