Chirac stelt verlaging inkomstenbelasting uit vanwege Stabiliteitspact (en)

French President Jacques Chirac will go back on an electoral promise to cut income taxes in an effort to move the French budget deficit to within acceptable levels for Brussels.

One of the main promises Mr Chirac made to the French electorate before elections in 2002 was that income taxes would be cut, but he has now announced that he will postpone these cuts for a year.

"The principle of having a tax cut - and cutting taxes next year - is not under discussion. What is under discussion are our budgetary levels and these force us to have a postponement in terms of income tax [cuts] this year", said Mr Chirac, according to Le Figaro.

The reason for postponing the tax cuts is that France's budget deficit - tax income minus public spending - will hit 3.6 percent this year, well in excess of the EU's maximum permitted level of three percent.

This has been the cause of damaging spats between Paris and Brussels and Mr Chirac is keen to be seen to take action to rectify the situation.

But postponing tax cuts will be unpopular with voters and could reduce French competitiveness to outside investors, further slowing already sluggish growth.