Europe's richest man is angry about French tax plans

He told the British newspaper Sunday Times that the plan was an attack on the French economy.

Under the plan, a 2 percent tax would be levied on assets exceeding 100 million euros. Arnault himself owns more than 1,400 times that amount. In total, the tax would apply to the top 0.01 percent of French citizens, or approximately 6,500 of France's more than 66 million inhabitants.

In the video below we explain why Arnault doesn't want to pay more taxes (and just how rich he actually is):

France is in political and economic trouble. The national debt is high, as is the budget deficit. Successive prime ministers have been unable to secure a stable parliamentary majority behind a balanced budget.

According to the French Ministry of Finance, if no action is taken, the budget deficit will reach 6.1 percent of gross domestic product (the size of the French economy) in 2026. This is considerably higher than the 4.6 percent target submitted to the European Commission. Incidentally, this 4.6 percent is already significantly higher than the maximum 3 percent the budget deficit is allowed to reach under the rules agreed upon by the EU countries.

If politicians do not take action, the national debt as a percentage of GDP would rise from 113 percent in 2024 to over 125 percent in 2029. In Europe, it has been agreed that the deficit may not exceed 60 percent of GDP.

Italy (138 percent) and Greece (153 percent) are already above the level that France could reach in four years' time; the Netherlands will reach almost 47 percent this year.

The higher the national debt, the more interest you have to pay. According to the French government, interest payments will reach €75 billion in 2026. This would make it the second-largest budget item, even ahead of education. This leaves less money for other things.

A few years ago, interest rates in Europe were still low, but in recent years they have risen, meaning the French government now has to pay higher interest rates when existing debts need to be refinanced.

The French government's credit rating, or grade, has deteriorated in recent years. Earlier this year, credit rating agency Standard & Poor's warned that it would further downgrade the rating if the government failed to substantially reduce its deficit within two years. A lower rating usually means paying a higher interest rate to entice investors to lend money to you.

All of this recently prompted the now-resigned Prime Minister Bayrou to say: "Our country is in danger because we are on the verge of over-indebtedness." The interest the French government is already paying on its debt is almost as high as Italy's. In recent years, the Italian government has had to pay much higher interest rates.

Incidentally, the French national debt was above 300 percent during both world wars, but these were exceptional times.

In this video, Bart Reijnen explains how quickly the French national debt is rising: