President Francois Hollande's government aims to save up to 2 billion euros ($2.59 billion) annually from 2016 under a proposed reform of France's generous system of family benefits unveiled on Monday.
The changes will stop short of cutting allowances outright for high-earning families, as had been floated by some officials. Instead, the bulk of the savings will come from reducing the income tax exemptions that wealthy parents can claim according to the number of the children they have.
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The proposed reform also includes some new spending, which means that the net saving will be 1.7 billion euros from 2016.
That saving will not go a long way towards reducing France's overall budget deficit, but the move sends a signal to France's European Union partners that it is prepared to make politically sensitive reforms, having been given two extra years to meet a budget deficit goal of 3 percent of output.
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