Faced with the threat of American military disengagement in Ukraine, France plans to boost its defense expenses. Several levers are favored by Emmanuel Macron and the Minister of Economy, Eric Lombard.
The United States has paused its military aid on Monday evening in Ukraine. This frost decided by the Trump administration covered about $ 3.8 billion in funds already allocated by the US Congress. Under these conditions, “new budgetary choices” must be made in France “taking into account the evolution of threats” indicated Emmanuel Macronduring his speech on Wednesday, March 5.“These will be new investments that require mobilizing private funding, but also public funding (…) For this, reforms, choices, courage,” he said.
In 2024, according to Statistthe amount of public spending dedicated to the French defense sector amounted to 47 billion euros, which corresponds to 2.1 % of the GDP in value of France, which amounted to 2,917.4 billion euros according to the numbers government. The military programming law provides for an annual increase of around 3 billion euros in this budget until 2030. But that will not be enough. On the same line as the President of the Republic, the Minister of the Economy assured that “we will have to go faster and stronger (…) We will have to spend more public money and therefore, indeed, it will impose more efforts”, on France Info this Tuesday. This is why, the increase in public revenues to finance investment appears as a solution favored by Bercy.
As a reminder, on February 20, the Head of State planned to make France’s military spending considerably jump, up to 5 % of GDP. A scenario envisaged “in the event that the United States decided to no longer protect Europe via NATO”, specifies France Inter. An option that has now been in credit since the assumed removal of the United States of Trump in Ukraine. If it were to be around 5 % of the country’s GDP, the defense budget would therefore reach around 125 billion euros.
High heritage and the targeted private
To finance these military expenses, “we will make the contribution on the high heritage evolve,” said Bercy tenant on Sunday, March 2 in an interview with the Parisian. If it is “not a new ISF”, a new device oriented towards the taxation of the heritage could however emerge. The objective: “Fight against tax optimization” and recover 2 billion euros per year. Companies should not be used.
At the same time, the effort will also be requested from the private sector “as a whole” according to the terms used by Le Figaro. A meeting allowing to discuss this investment lever to finance future military expenses in France is scheduled for March 20 in the presence of the Minister of Economy, armies, investors, bankers and insurers, specifies the daily. At the end of February, Emmanuel Macron mentioned the creation of a new regulated booklet, on the model of booklet A, which would allow the French to orient their savings towards defense companies. A vision shared by Eric Lombard.