Concession on electricity, gesture on immigration… Michel Barnier tried on Thursday, November 28 to convince the National Rally to give up censorship by giving in on several points, a few days before crucial deadlines on budgetary texts in the Assembly national. The Prime Minister nevertheless assures that these “adjustments” do not “call into question” France’s “commitments” to the European Commission. “We are doing everything to stay around 5%” deficit in 2025, he said, while France, the second economy in the euro zone, is already being singled out by Brussels for its accounts and is awaiting the decision of the rating agency S&P on its debt Friday evening. Here are the main accommodations conceded by the minority executive.
Taxation on electricity
The government announced on Thursday that it would give up significantly increasing taxes on electricity, a major new concession on its budget for 2025. Setting itself up as a guarantor of the purchasing power of the French, Marine Le Pen had notably demanded that the government renounce to drastically raise a tax on electricity.
The leader of the RN deputies won her case: this tax (TICFE) will increase, but not beyond the level which prevailed before the deployment of the tariff shield against inflation, now relaxed. The government will therefore not be able to count on the 3.4 billion euros that this measure was to bring in, according to Matignon.
As a result, the electricity bill for the approximately 80% of French people at regulated rates will fall more than initially announced by the executive: he had promised a reduction of 9% thanks to the decline in wholesale prices on the market, it will be by 14% as of February 1, 2025. To partially compensate for the shortfall, the Senate voted on Tuesday, against the advice of the government, an increase in the gas tax, estimated at around one billion.
State medical aid
The executive also agrees, at least in part, to the RN’s request to reduce state medical aid (AME) for undocumented immigrants. Michel Barnier wants the care provided to be “significantly” reduced, and promises to initiate next year “a reform” of the AME “to avoid abuse and misappropriation”, one of the constant demands of the far right and part of the right on immigration.
Revaluation of pensions
Pensions were also the subject of a compromise, this time to satisfy the right. The boss of the Republican Right deputies, Laurent Wauquiez, himself announced it on television. While the government planned to postpone the indexation of pensions by six months, to July 1, 2025, it agreed to revalue them by half of inflation on January 1, and to provide a catch-up for all pensions below minimum wage in July.
Depending on inflation, “we will be between 500 and 800 million euros returned to small pensions”, reducing the hoped-for savings to 3 billion, indicated the Minister of the Budget, Laurent Saint-Martin, on November 12. The RN wants to go further and asks for the indexation of pensions on January 1 “for all retirees”.
Employer contributions
By dropping ballast on reductions in employer contributions, the government is this time making a gesture towards the EPR deputies, including former Prime Minister Gabriel Attal. Reductions in business charges will ultimately be maintained up to 2.25 SMIC in the 2025 Social Security budget, Prime Minister Michel Barnier indicated on Thursday. While the initial project planned to eliminate 4 billion euros in reductions in charges, this amount was reduced to 1.6 billion.
Contribution requested from communities
To calm criticism from local elected officials, who are rebelling against the contribution of 5 billion euros requested from communities, the government has decided to soften the potion. The majority in the Senate wants to limit the effort to 2 billion.
The Minister of Partnership with the Territories, Catherine Vautrin, indicated on Wednesday that according to the discussions underway in the Senate, half of the departments, or around 50, would be exempt from levies on revenues, the main lever for involving communities in the budget. 2025.
Of the five billion requested from communities, three were initially to come from a “savings fund” imposed on the 450 “largest” communities, that is to say those which record more than 40 million euros in real expenditure of operation, excluding the most fragile. The new version of the text moves towards a greater number of contributing communities, but for smaller amounts.
“Red lines”
Despite these concessions, “there are still difficulties”, estimated Marine Le Pen in The Worldsetting an ultimatum to the head of government. The Prime Minister “has until Monday” to respond, warned the head of RN deputies. Monday is in fact the deadline for the government to amend its draft budget for Social Security. However, Marine Le Pen is still calling for the revaluation of the pensions of all retirees on January 1 and the cancellation of the drug reimbursements initially planned. She also adds that the executive must specify how it intends to financially compensate for its concessions. “Michel Barnier’s latest announcements are not financed by structural savings. They therefore worsen an already abysmal deficit and that is not acceptable,” the president of the RN group wrote this Friday on X.
On the left, the concessions to the RN caused an outcry. “The Prime Minister definitely turns his back on the Republican front,” reacted the boss of the Socialists Olivier Faure, accusing Michel Barnier of turning “towards the extreme right” to “avoid censorship”, in an “alliance of shame ” sealed on “restriction of state medical aid”.