In fact, we cannot say that, since 2017, France’s public finances have been managed with great rigor. While the Covid pandemic is behind us and aid to deal with the 2022-2023 energy crisis ends, our budgetary situation is not improving. Worse: it gets worse.
According to figures transmitted by Bercy, the State deficit between January and April 2024 has already risen to 92 billion euros, an increase of 10% compared to the same period last year. Ten days ago, the Court of Auditors announced a slippage in the health insurance deficit this year, while the Retirement Orientation Council explained to us this week that the extension of the retirement age to 64 years will not be enough to balance the system.
We must look at the situation lucidly, which the National Rally does not seem capable of doing: our State and our social security are oversized compared to the size of our economy. The “protective state” is a luxury product that we can no longer afford. Our deficits will therefore only be able to decrease if we cure our spending incontinence. That would be the real change.
Return to the retirement age? Absolute madness
It is prickly to note that many RN voters criticize the Macronist management of public finances – we can understand them – but without seeing that reading the RN program suggests that we joyfully accelerate towards the bottom of the impasse. The measure which best reflects this state of mind is undoubtedly the lowering of the retirement age from 64 to 60 or 62 years – depending on the situation – which would cost around ten billion euros.
This absolute madness would, so to speak, be a double whammy, adding billions to our deficit while mechanically reducing the employment rate, and therefore the potential growth of our country. As the RN plans, more conventionally, other budget increases, notably in the army and internal security, for this program to be credible, a solid trajectory of reduction in public spending would be necessary. Now, what do we see? The opposite obviously.
The RN announces a reduction in VAT on basic necessities – here again, around ten billion euros are at stake -, tax exemptions for young people, a reduction in taxation on inheritance or an abolition of corporate tax for young entrepreneurs. Marine Le Pen mentions 16 billion euros in savings linked to the drop in migratory flows: less spending linked to welcoming foreigners, fewer social benefits, fewer charges for the police and justice. Assuming that this reasoning is correct, and we can seriously debate it, it is difficult to see how it arrives at this colossal sum. Amount which, in any case, does not cover the expenses it announces.
VAT is the least harmful tax for the economy
Unless it is the increase in compulsory contributions which completes the financing. The RN is in favor of the restoration of the ISF and the establishment of a tax on superprofits, two economic nonsense which go against the need to strengthen our productive economy. Because if there is one strategy that has worked since 2017, it is the one which consisted of reducing taxation on capital and businesses, and which has given our country back the attractiveness it lacked.
Work less hours, reduce VAT which is the least harmful tax for the economy, increase taxation on capital: this is an indigestible cocktail which will bring no lasting economic gain to our fellow citizens and which will further degrade our public finances. . The choice of the RN is economically counterproductive and financially adventurous. That Eric Ciotti, the first critic of Macronist debt management, allies with the RN, shows to what extent LR has lost all programmatic compass.
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