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Rich French set for hefty family allowance cuts

France’s richest families are set to have their family allowances cut by as much as three quarters, as part of the latest austerity measure aimed at reducing the country’s whopping public deficit.

Rich French set for hefty family allowance cuts
File photo: Philippe Huguen/AFP

The cuts, which are laid out in a report set to be handed to the prime minister this week, are needed to try to chop down the €2.6 billion debt held by the families section of France’s social security system.

The ‘Fragonard’ report produced by the Family High Council (Haute Conseil de la Famille) and named after its author Bertrand Fragonard, comes after President François Hollande rejected earlier claims that the government was to tax the allowances during last week's TV address to the nation.

The report, details of which were published in France’s Les Echos newspaper on Tuesday, suggests wealthier families would receive decreased allowances on a sliding scale based on their income.

"All families would retain the right to claim family allowances, but the amount would decrease according to their income," the report spells out.

According to Les Echos, the report suggests reducing grants by three quarters for the most well off.

The key question of a reform that will no doubt spark controversy over the coming months, will be at what income level the cuts will come into play. This, according to the authors of the report, all depends on how much the government wishes or needs to save each year.

If the government decides to save the more modest amount of €450 million a year, the income boundary would be set at €7,296 a month for a couple with two children, Europe 1 reported.

Those who earn any more than that would receive only a portion of the allowance, with couples earning €10,215 or more each month only receiving a quarter of the allowance – the minimum grant.

Some socialist deputies want to go further however. In an interview with Les Echos last month Gerard Bapt, the deputy for Haute Garonne said the income limit for couples with two children should be set at €4,416 a month.

Households earning more should only be eligible for half the allowance.

According to Bapt, this would save the government €1 billion a year, but the Haute Conseil fears this would have a severe impact on France's middle class.

A recent Ifop survey published in the weekly Journal de Dimanche revealed 66 percent of French people are in favour of reducing family allowances, depending on earnings.

In France the allowance is only paid out to families with two or more children.

A recent report by France TV contradicted the popular view that France is the most generous country in Europe when it comes to family allowances. Sweden, Ireland and Germany all hand out more than France.

In Spain, Italy and Great Britain, the allowances are limited depending on salary. In the UK, for example, families where one couple earns €50,000 or more each year no longer have the right to receive the full child benefit.

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GREECE

Merkel’s Greece visit to focus on post-austerity solidarity

German Chancellor Angela Merkel headed to Greece on Thursday amid tight security to show post-austerity solidarity with Athens and lend diplomatic support on a name change for neighbouring Macedonia.

Merkel's Greece visit to focus on post-austerity solidarity
Merkel and Greek Prime Minister Alexis Tsipras during his visit to Berlin in December 2016. Photo: DPA

Nearly 2,000 police have been deployed to supervise Merkel's visit and authorities have banned demonstrations around the home of Prime Minister Alexis Tsipras, where the two leaders are set to meet.

Relations between Greece and Germany have calmed since her previous visits in 2012 and 2014, which were overshadowed by angry anti-austerity rallies.

But small protests by leftist parties and neo-Nazi groups were expected outside the no-go zone, while a police source said the authorities had opened an inquiry into five envelopes containing “a powder of unknown origin”, which were sent to regional universities this week.

Merkel's visit is seen as a chance to leave behind a fraught period caused by tough German demands for Greek austerity accompanying EU bailouts for the country during the eurozone sovereign debt crisis.

Greece, which left eight years of bailout programmes behind last year, has also been deeply affected by the European migrant crisis in recent years.  

Ahead of the trip, Merkel's spokeswoman Martina Fietz said she and far-left leader Tsipras would discuss “European and international” issues.

'Underline European solidarity'

Greek daily Kathimerini quoted Merkel as saying Greece had Germany's full support, saluting the “close ties” between the two EU states and NATO partners.

“I know that the past few years have been very difficult for many people in Greece. Europe showed its solidarity through three rescue programmes and supported Greece in its course of reforms towards fiscal and economic stability,” Kathimerini quoted her as saying, hailing the “great progress” made since.

SEE ALSO: Here's why Germany is so 'tough' on Greece over its debts

Thanos Veremis, professor of political history at the University of Athens, told AFP that just months ahead of European Parliament elections “Angela Merkel's visit will underline European solidarity with Greece, a success for Europe”.

Merkel is also due to hold talks with President Prokopis Pavlopoulos on Friday and then with New Democracy leader Kyriakos Mitsotakis, whose party is an EU Parliament ally of her Christian Democratic Union.

The leaders are likely to discuss the still thorny issue of an impending name change for Greece's neighbour Macedonia.

The former constituent part of Yugoslavia shares the name of a northern Greek province.

Tsipras and Macedonian counterpart Zoran Zaev have agreed in principle for Skopje to switch to “the Republic of North Macedonia”.

But Skopje lawmakers have still to vote through a move which entails four constitutional amendments and requires two thirds support in parliament.

The European Union backs a switch, which would open the door to membership in the bloc and also in NATO.

Merkel visited Skopje before last year's referendum on the change to show support.

Yet the issue remains divisive in Greece where one party in Tsipras's coalition opposes it, threatening his parliamentary majority.

New Democracy, the main opposition party, is also against the name change
and is pushing for new elections, which are officially not due before October.

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