France announces harshest budget so far

To the dismay of French bankers, business leaders and the wealthy, President François Hollande has remained true to his word and unveiled €20 billion in new taxes, including a 75% "supertax" band that will hit the rich.

To the dismay of French bankers, business leaders and the wealthy, President François Hollande has remained true to his word and unveiled €20 billion in new taxes, including a 75% "supertax" band that will hit the rich.

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In what Hollande has described as France's harshest budget in 30 years, business and personal taxpayers were asked on Friday to make an "unprecedented effort" to slash the country's public spending deficit.

However, the Socialist government sidestepped swinging cuts in public spending, including pensions and state salaries, in its 2013 budget, which aims to find €36.9bn in savings.

It was also forced to concede it could not keep its pledge to get the country out of the red by 2017.

The budget was a delicate balancing act in which Hollande sought to reassure investors and the financial markets.