“Effort” is the word that continues to be repeated by members of Miche Barnier’s government, who presented this Thursday his finance bill for the year 2025 (PLF) with which aims to save 60 billion at the French Herald through spending cuts and tax increases. Finances choked by a huge debt and a deficit which, without these accounts, threatened to close the year at 7%. Even if the government’s forecasts are now 6%, they will therefore only be able to correct a little this year.
“An effort as urgent as necessary to return to a sustainable budgetary trajectory, which preserves our financing conditions and, ultimately, allows us to stabilize and then reduce our debt,” explained the Minister of Economy and Finance, Antoine Armand, and Laurent Saint-Martín, Minister Delegate in charge of the Budget.
The Minister of Finance himself assured during a press conference that the key to these public accounts was to “change the way in which public spending is used”.
The coming weeks will be intense for Prime Minister Michel Barnier, the calendar is already organized, as long as the President of the Republic, Emmanuel Macron, does not decide to use article 49.3 of the Constitution which allows him to approve laws without going through the National Assembly, as it did for pension reform.
If everything goes as planned, the debate on the Income section (where these taxes are regulated) It will be debated from Monday October 21 to Friday October 25 in the National Assembly.L. The solemn vote on this first part of the 2025 Budget is scheduled for Tuesday October 29. The part dedicated to expenses will be debated on Tuesday November 5. Once this process is completed, the vote for the entire PLF is scheduled for November 19, two days before the end of the 40-day deadline set by the Constitution for the first reading of the budget in the National Assembly.
Although government authorities defend these budgets tooth and nail, the High Council of Public Finances (HCFP) assures that Barnier’s forecasts are “fragile due to the optimism of the macroeconomic scenario on which they are based”, affirms- he. the organization’s experts.
It is true that setting a deficit target of 5% of GDP for next year “would mark a change in trend compared to recent years”, they say, but they are not convinced that this target will be achieved.
The president of the HCFP, Pierre Moscovici, assured that the coming months “are going to be decisive”. He reiterated that what needs to be done is “set the course, we cannot afford another budget hole.”
For Moscovici, the fact that the French public accounts close with a shortfall of more than 6% of GDP is “an extraordinarily spectacular slippage, something that I have never seen”, he also declared, in reference to the 2023 results.
Concerning the recovery of the tax increase, the Government’s forecasts of receiving an additional 20 billion were not up to par for the HCFP. For the organization, revenues will be 30 billion, which will compensate for the possible failure to reduce public spending by 40 billion.
Also yesterday, the National Institute of Statistics and Economic Studies (INSEE) published its annual growth forecast of 1.1% for this year. This impetus is given, in the third quarter of the year, by the Olympic Games.
