French President Francois Hollande on Tuesday (14 January) pledged to cut €50 billion in government spending over the next four years and give French firms tax breaks in order to jumpstart the eurozone's second-largest economy.

In an almost three-hour long press conference, Hollande promised to slash €30 billion in tax obligations for French firms, by giving them an exemption from family welfare obligations.

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France wants to catch up with Germany in economic power (Photo: elysee.fr)

"We must do everything for employment. This is my priority," Hollande said, adding that his goal was to achieve "social and economic convergence with Germany."

Unemployment in France has surpassed ten percent, while the economy struggles to regain power - contracting by 0.1 percent in the third quarter of 2013.

Last year, France got a two-year extension from the EU commission to bring down its deficit to three percent of GDP from over four percent as it currently stands.

But in return it has to implement reforms.

With public spending at the second-highest rate in Europe (57% of GDP), Hollande's fiscal policies had to touch on this sector, even if he is a Socialist politician.

Hollande called his fiscal proposals a "responsibility pact" that will also require companies to hire more people in return for the tax breaks.

A new committee will be established to monitor employment under this pact, he said.

On EU economic governance, where Hollande and German Chancellor Angela Merkel are at odds over the necessity to bring about a treaty change, the French President said he wants a "proper government" for the Eurozone.

"We need to make progress towards an economic and monetary union, with a Eurozone which can have a proper government with growth and employment as objectives. It should also have a fiscal capacity which could help us in our actions. This would be a government for the Eurozone," he said.

He did not specify if he changed his mind on treaty change, however.

Hollande's personal life was also touched upon during the press conference, as he did not deny having had an affair with an actress and promised to clarify the situation with his partner, Valerie Trierweiler, before a US trip next month.