* New French Tax Break Aimed At Boosting Consumer Credit Market
The French parliament has adopted new measures that will give people tax breaks on financed purchases in a bid to help boost consumer spending and economic growth. The plans announced by the French Finance Minster Nicolas Sarkozy last month will result in a tax cut worth 25% of the interest paid on consumer loans in 2004 and 2005 with an annual limit set at Euros 600.
The French consumer credit market has been weak in recent times, and French banks have been lending considerably more to foreign borrowers through their overseas branches than to borrowers at home.
Many analysts have welcomed the move, suggesting that the tax cuts will help encourage more spending rather than saving in France's stagnant economy, and boost profits in the banking sector.
However, not all are impressed by Sarkozy’s proposal, noting that the tax cut is only a temporary move and quite limited in scope.
