There are many important issues to deal with for Michel Barnier, appointed in Matignon on Thursday 5 September, after two months of managing current affairs for the resigned government of Gabriel Attal. The Prime Minister spoke on Friday at the 8pm news programme on TF1.
Completing the 2025 budget
This is an absolute emergency, as the timetable is very tight. By Friday 13 September, the executive must complete the draft state budget for 2025 and transmit it to the Higher Council of Public Finances, so that it can be examined by Parliament as of 1 September.Ahem October, as provided by law.
At Bercy, the resigned ministers Bruno Le Maire and Thomas Cazenave have already prepared the work, especially on expenditure, and at Matignon, Gabriel Attal and his advisers have made the first arbitrations. Responsible for the management of current affairs, the resigned Prime Minister opted for a budget for 2025 that was as little compromised as possible, essentially contenting himself with renewing the 2024 budget. Total state expenditure was frozen at 492 billion euros, with little change in the distribution between ministries, apart from a particular blow addressed to the Ministry of Labour and Employment.
Will Michel Barnier stick to this version of the finance bill? Will he want to change it, with more robust savings measures to limit the deficit? Will he propose new spending to respond in particular to social tensions and climate change? Impossible to say at the moment. If he does not touch the bill that his predecessor left on his table, he will still be able to modify it during the parliamentary debate, but in principle in a more limited way.
Stopping the new slide in public accounts
While he is preparing the 2025 budget project, the new Prime Minister will have to deal with another emergency: the deviation of the 2024 accounts. A month and a half after being alerted by a Treasury note, Bruno Le Maire warned parliamentarians on Monday 2 September that the French public deficit was seriously falling. Instead of starting to decrease, as intended, the public accounts deficit risks increasing even further in 2024, to 5.6% of gross domestic product (GDP), according to the resigning minister, who heads the local communities. This makes the commitments made by Emmanuel Macron to reduce this deficit to less than 3% of GDP in 2027 almost obsolete. According to Bercy, around fifteen billion euros of credits should be frozen as soon as possible, as well as the buybacks of shares of energy companies. This involves submitting a draft amendment to the finance law to Parliament in advance. It is not the easiest text to be approved by a very fragmented assembly.
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