In France, the first budget of the Barnier government will be submitted to MPs this week, Budget Minister Laurent Saint-Martin confirmed on Wednesday 25 September in a hearing before the Finance Committee of the National Assembly. Accompanied by Economy Minister Antoine Armand, they confirmed a reduction in public spending for 2025.
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Spending less to cover the deficit is the new government’s stated goal. Combined with tax increases targeted at the wealthiest households and large companies, the budget cuts would help bring French finances back into line.
The situation is ” severe “, according to the Minister of the Budget, Laurent Saint-Martin, and Minister of Economy, Antoine ArmandThe deficit for 2024 risks exceeding 6% of GDP, far from the 5% initially planned, on which the outgoing government was counting and well above the threshold of 3% set by the European Union.
To get things back on track, ” We will need to make significant collective efforts “, warned the minister from the presidential camp, committing to ” to speak the truth ” and to promote ” the dialogue ” with Parliament on this issue. It does not rule out reviewing the amount of 492 billion euros of expenditure mentioned in the draft 2025 budget of the previous government and, for 2024, cancelling all or part of the 16.5 billion euros of frozen credits.
However, he ruled out a “ general tax increasee », because « We don’t touch the modest people and the work and the middle classes “, revealing his opposition to a freeze on income tax scales. Prime Minister Michel Barnier had mentioned on Sunday possible tax increases targeted at the wealthiest taxpayers and large companies, breaking the taboo in force since Emmanuel Macron’s arrival at the Elysée.
Deficit slippage
According to the government, there are two reasons for this slippage. First, consumption has not been up to par, and the less the French spend, the less taxes fill the state coffers. The second explanation would be ” Business wait-and-see attitude ” during the period of political uncertainty this summer.
The financial recovery will be difficult. To meet its commitments to theEuropean UnionParis must absolutely fall below the 3% deficit mark.
The Minister of Economy has also confirmed that he has obtained an additional period to send his roadmap to Brussels. With more than a month’s delay, it is expected by October 31. I confirm that the week of October 9 will be the week of submission of the draft finance bill for 2025. “, said Laurent Saint-Martin. The draft budget for Social Security will be presented the same week.
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