European austerity or the French social welfare model? Where is France going with its contradictory desires and a record national debt above two thousand billion euros?<br /><br />The debt is double what it was a decade ago. It is now within five percent of the total national income. <br /><br />In part, living in debt pays for the progressive social model so cherished by the French. And the government is letting the debt grow with its 2015 budget — just unveiled. That is even as the state embarks on a 50-billion euro spending diet over three years. <br /><br />The French are worried how that trimming will affect their health system, education, pensions and employment protection and family benefits. <br /><br />Eager to avoid outright budget austerity, the government is loathe to make unpopular cutbacks and has so far largely focused its belt-tightening on limiting public spending growth to the rate of inflation.<br /><br />The political fallout from the debate saw anti-austerity Arnaud Montebourg replaced in August by the liberal Emmanuel Macron as Minister for the Economy. <br /><br />Defending the French social model has long been the battle cry of French governments but it has become the François Hollande government’s nightmare.<br /><br />Prime Minister (since March) Manuel Valls insists that the euro zone’s second largest economy (after Germany) will now tackle its problems head-on. Valls has won two confidence votes in the Assemblée Nationale.<br /><br />Valls said: “The members of Parliament have decided we will carry our plan to term because this is what the French people want: that we get back to work and that we rise to meet the challenges ahead of us. I thank you for your trust; I will not disappoint you, but will serve France and the French people.”<br /><br />Paris is pushing European Union deficit targets off for another two years saying this is justified if France is to avoid slipping into a recession that could weigh on a European recovery. <br /><br />The government said it is being fiscally responsible, rejects austerity and will not demand further effort of the French.
