Ultradry diet in 2025, then several years of still strict diet. This is the horizon that is emerging in budgetary matters, according to the multiannual program prepared by Michel Barnier to restore public finances. After an enormous initial effort, with significant cuts planned in public spending, the State, Social Security and local authorities should tighten their belts in the long term, even if it is with a little less of vigor.
At the same time as the draft budget for 2025, which must be adopted by the council of ministers on Thursday, October 10, the new government has begun to develop a medium-term recovery plan. A document required by the European Commission, which this summer initiated an excessive deficit procedure aimed at France. Brussels hopes that this “medium-term national budgetary and structural plan”, according to the official term, will be scheduled for the end of October. Upstream, the French executive chose, without being legally obliged to do so, to have the main lines evaluated by the Higher Council of Public Finances, which depends on the Court of Auditors.
In this document, transmitted on 1Ahem October in the High Council, obtained by online media. Context and also consulted by the world, The Government plans to extend the effort to consolidate public finances over seven years, the maximum authorized by European standards. An initial period of four years would allow us to regain control of the French public deficit, which is currently out of control. However, this phase would not take it below 3% of gross domestic product (GDP), the key threshold set by the European Maastricht agreement in 1992. Austerity measures should therefore continue. After reaching a maximum of 6.1% of GDP in 2024, according to the latest forecasts of the Ministry of Economy, only in 2029 would the public deficit fall below 3% again, falling to 2.8%.
initial blow
To achieve his objectives, Michel Barnier plans to deliver a very strong blow in 2025, the first year of his plan. The proposed trajectory foresees a budgetary effort, a “primary structural adjustment” in community jargon, of 0.78 points of GDP on average per year for seven years. Or around 23 billion current euros per year. But, in 2025, this “adjustment” would be almost double more important. It would represent 1.4 points of GDP, the equivalent of 42 billion euros in one year, both in the form of reduced spending and increased taxes. “The adjustment is, therefore, “frontal”, since it is more related to the beginning of the trajectory,” comments the government in its somewhat technocratic document.
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