The government said on Monday that it had identified “at least 10 billion euros in savings” to allow France to redress accounts degraded by successive crises, in particular by cutting health expenditure and tax advantages for fuels. The Ministry of Economy and Finance also told AFP that at least 12 billion euros in savings will be needed to complete the draft budget for 2024.
After escaping the caudine forks of agency S
Organized in Bercy on his initiative and that of his colleague in charge of Public Accounts Gabriel Attal, these meetings follow the annual reviews of State, community and social administration expenditure, launched a few months ago. However, they are shunned by the three main associations of local elected officials, who disagree with the analysis of the situation.
During a concluding speech, Prime Minister Élisabeth Borne returned to the government’s method of “consolidating our public finances”. “There are other paths than austerity policies and tax increases,” she insisted, excluding the use of these two tools. The head of government has outlined several areas: “strengthening our growth potential”, “carrying out the necessary reforms even when they are difficult”, citing unemployment insurance or pensions, or even “the effectiveness of public policies and the expenditure control.
Housing aid with the abolition of the Pinel system and the overhaul of the zero-rate loan (PTZ), for a saving of two billion euros in the long term, as well as support for employment in this period of low unemployment are also in the sights of the government. “Companies have never had so much difficulty recruiting. However, we continue to massively support employment. When the unemployment rate decreases, the cost of employment aid must decrease, ”insisted the minister, citing apprenticeship and the personal training account.
Another target, the tax advantages on fuels enjoyed by certain professions such as road hauliers or farmers (non-road diesel), while France is embarking on the shift to energy transition. They will be phased out by 2030, with support to enable these professions to make this shift. The objective is to reduce France’s heavy debt to 108.3% of GDP in 2027 (compared to 111.6% at the end of 2022), which ranks it on the side of the poor European students, and to bring it below the European objective of 3% the public deficit (4.7% at the end of 2022).
To return to the nails, the government refuses any increase in taxes. “We are not proposing austerity or angelism: we are proposing responsibility,” said Bruno Le Maire. The government is also counting on the end of the energy shield, the gains from reforms such as pensions or unemployment insurance, full employment or even economic growth which it anticipates to be more dynamic, after a sudden brake in 2023. These measures are deemed all the more necessary as the economic environment is getting tougher.
Suspended during the Covid, European budgetary rules will apply again next year and the sharp rise in interest rates is significantly increasing the debt burden, which could become the main item of State expenditure. Already, the executive has multiplied the announcements in recent weeks. He thus froze an additional 1% of the credits of the 2023 budget (1.8 billion euros) which will be partially cancelled, according to Bruno Le Maire, and asked the ministries to generate 5% savings, excluding salaries, in 2024 in particular for finance the energy transition.
But between refusal to increase taxation and social tension in the face of high inflation, the enterprise of controlling expenditure promises to be delicate. Especially after a painful pension reform and without an absolute majority in the National Assembly. The recent promise of a tax reduction of 2 billion euros for the middle classes and the new revaluation of the salaries of civil servants testify to the difficulty of tightening the screw.
