France has reached the point where it can no longer increase taxes without harming growth and costing jobs, said Rehn.
Plans by Socialist President François Hollande to wring a further €6 billion out of the economy in taxes in the 2014 budget have angered businesses and households and prompted the IMF to warn that more tax rises could stifle a fragile economic recovery.
Rehn reiterated that proposed reforms by the government were going in the right direction, but were not far-reaching enough or being implemented sufficiently quickly. When asked whether tax hikes should stop, Rehn said: "Absolutely. The tax increases in France have reached their fateful point. Raising new taxes would break growth and weigh on employment", he said. "Budgetary discipline must come a reduction in public spending and not new taxes."
The French government rushed to assure tax-weary companies and consumers that a new form of green levy meant to encourage industries and households to cut energy consumption would not amount to new tax increases.
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