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(Bloomberg) — French Prime Minister Sebastien Lecornu has asked ministers to prepare measures to help individuals who depend on cars after fuel prices surged on the Iran war.
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“While I don’t believe in blindly paying out billions, I am in favor of targeted aid,” he said Thursday at a press conference in Bordeaux.
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The government has already announced very limited fuel subsidies for some sectors such as trucking and fishing, and an expanded distribution of energy support to low-income households. But it has so far avoided broader, costly measures after indiscriminate outlays in 2022 contributed to expanding a budget deficit the country is still struggling to reduce.
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Lecornu said any subsidies will be implemented on a monthly basis to allow the government to quickly adapt and control costs.
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“We won’t abandon anyone, but we won’t spend money we haven’t got,” he said.
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Opposition lawmakers including far-right leader Marine Le Pen have called for steep cuts to taxes on gasoline and diesel and accused the state of profiting from a boost in revenues as prices rise.
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Budget Minister David Amiel said on Friday the state has received additional sales-tax revenue on fuel of around €120 million, while a levy on volumes has brought in €130 million more than expected after drivers rushed to refuel in early March on fears of shortages due to the conflict in the Middle East.
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But he added that the government estimates that targeted aid already far announced totals about €130 million and that increases in bond yields will drive up 2026 debt financing costs by around €3.6 billion.
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“There is every reason to fear that the possible extra revenue for the state will add up to millions while the cost of the crisis will add up to billions,” Amiel said on Franceinfo radio.
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As well as repeating that any new aid will be targeted, the budget minister said that every euro of new spending would be offset by cuts elsewhere.
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(Adds comments from budget minister from fifth paragraph.)
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