To the dismay of a swath of French bankers, business leaders and the wealthy, President François Hollande has remained true to his word and unveiled €20bn (£16bn) in new taxes, including a 75% supertax" band that will hit the rich. However, the Socialist government sidestepped ... cuts in public spending, including pensions and state salaries, in its 2013 budget, which aims to find €36.9bn in savings. The budget was a delicate balancing act in which Hollande sought to reassure investors and the financial markets, while simultaneously hiking taxes on large businesses and high-earners. However, it commits the government to an austerity programme that will be unpopular with leftwingers in the party, at a time when unemployment is rising and the economy teeters on the brink of recession. The budget aims to raise two-thirds of the £36.9bn savings with extra taxes split evenly between households and large companies, plus more than €10bn in public spending cuts. The burden between taxes and spending cuts would be shared 50-50 from 2014. The standout measure, from a public perspective, was a new 75% tax rate on people earning more than €1m a year. A new 45% income tax band is to be introduced for those earning more than €150,000 a year.

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