国际英语新闻:France sketches out new austerity plan to secure AAA rating

PARIS, Nov. 7 (Xinhua) -- French Prime Minister Francois Fillon on Monday sketched out new austerity plan, including accelerating pension reform and intensifying fight against tax loopholes, in hope to reduce public deficit and secure the country's AAA rating.

According to Fillon's presentation, the French government plans to speed up the pension reform by implementing the 62 retirement age in 2017, earlier from previously scheduled 2018, to increase VAT on many goods and services between 5.5 percent and 7 percent, and to raise corporation tax by 5 percent on companies with a turnover above 250 million euros (343.5 million U.S. dollars) a year.

In addition, the government would strike further against the tax loopholes with a target to gain extra 2.6 billion euros (3.6 billion dollars).

"We want to protect the French against the serious problems facing other European countries," Fillion said.

Overall, France aims to reap extra 18.6 billion euros (25.6 billion dollars) over the next two years: 7 billion euros (9.6 billion dollars) in 2012.

In October, the ratings agency Moody's downgraded the ratings of the biggest French banks given their exposures to sovereign debt of Greece, Italy and Portugal.

It also warned to put France's triple-A sovereign credibleness on negative review in the coming months.

Both French ministers and central bank governor have stood firm on defending the second largest eurozone economy's credibility. Early this year, Sarkozy government has already announced the need to collect 12 billion euros (16.5 billion dollars) to avoid sliding back into recession by freezing public spending and reducing tax loopholes.

Following a near flat growth in the second quarter, France revised down growth forecast of gross domestic product (GDP) for 2012 from 2.25 percent to 1.75 percent.

In his presentation, Fillon indicated the lower expectation of 1 percent growth for 2012, echoing Sarkozy's estimation on Oct. 27.

France's total accumulated debt will be higher in 2012 at 87.4 percent of the GDP mainly due of France's contribution to bail out debt-ridden countries such as Greece, Portugal and Ireland. Its 2011 debt rate was projected to reach 85.5 percent.