Bercy took a dim view of him, but eventually gave in. In the latest version of the finance bill for 2024, passed once again in force by Elisabeth Borne after yet another 49.3 on Tuesday, November 7 in the evening, a new amendment appeared: the Livret A will now be able to be used to finance the French defense companies. Until now, the preferred French placement made it possible to support social and solidarity housing, as well as certain local authority projects. It must be said that the savings product regulated by the State continues to be attractive. In August, its total outstanding amount reached 405.7 billion euros, a record, after another positive collection of more than 2 billion euros.
The direction of Livret A towards the French defense industry is not a new request. A little over three months ago, the Constitutional Council censored an article of the military programming law which provided for a provision to this effect. Before that, the government had put forward the idea of financing the next nuclear reactors in the territory via the Livret A. But defense needs seem to have taken precedence. If this measure does not surprise the economist Philippe Crevel, director of the Circle of Savings, there is nothing to indicate that it will be effective. Above all, it could open the doors to new requests from other sectors seeking financing.
L’Express: Are you surprised by the resumption of this amendment which will make it possible to finance the defense industry via the Livret A?
Philippe Crevel: For several months, even several years, parliamentarians have been proposing to use Livret A to finance defense or other causes. I’m not totally surprised, even if after the failure of the military programming law, one would have thought that it would be forgotten. But, on the one hand, with all the news on national defense and French rearmament, and on the other hand the increase in the outstanding Livret A since the beginning of the year, this concomitance gives some ideas and was transformed into an amendment to the finance bill for 2024. I am more surprised by the reversal of Bercy, who was rather opposed to this measure and who, tired of fighting, gave up, saying to himself: “If the parliamentarians wish, in this era of relative majority, while we must not completely displease Parliament, we will accept it”, for the moment at least.
Is this a good measure?
We will have to see what ultimately accrues to this sector after the other financing already planned for local authorities and the social and solidarity economy. We add an additional box. Moreover, Bercy’s opposition was to say that this must not turn into infinite demands.
Does that mean this could open the floodgates?
Yes and finally why limit yourself to national defense? Why not finance leisure, culture, tourism or even agriculture? All sectors need money right now.
Could this signage be difficult to put in place?
Today, the resources of the Livret A and the LDDS (Sustainable and Solidarity Development Booklet) finance sectors over the very long term, such as social housing over 50 years. There are also shorter-term loans for the social and solidarity economy. Technically, no, it’s not difficult to set up. Defense is an industry with long cycles, with research and innovation, production and sales. This spans around thirty or forty years. The Rafale was built in the 80s and we are just starting to export it. This can obviously fit with social housing, even if there is no common point between the two, except this long-term aspect.
Livret A is short-term liquid savings and we finance very long-term investments. There is therefore an intermediation cost, because the saver can withdraw his money at any time, this liquidity must be ensured. When there is one euro placed in a Livret A, there are 50 cents which are placed in the short term to ensure liquidity and 50 cents which are allocated to long-term financing. Is this method of financing, which is a French specificity that no other country has dared to imitate, the most economical there is? It’s a question.
The Livret A must in theory finance the general interest, is this the case here with the defense industry?
Everyone is free to think what they want. Can making bombs with Livret A after financing social housing be put on the same level? We can obviously consider that the security of the French is in the general interest. At a time when the government excludes TotalEnergies from funds labeled ISR (Socially Responsible Investment) and on the other hand we put it in the Armament Booklet, we can ask ourselves questions.
A few months ago, Livret A was still in the running to finance new nuclear reactors, why do you think the defense industry was preferred?
Defense companies need resources to finance their program. Before selling, you obviously have to research, produce… The idea is perhaps to replace advances from the State, due to financial difficulties, with resources coming from Livret A. In the current climate with the wars in Ukraine and in the Middle East, it appeared more urgent than the question of nuclear power plants which are over periods of 30 or 40 years. Even if in my opinion, the financial situation of EDF will force the State either to recapitalize it or to find means of financing.
Until now, the money deposited by the French in the Livret A was used to finance social housing, urban policy and communities. Could this turn be poorly received by the French?
Even if the government has clarified that this will not concern the resources of the Caisse des Dépôts which are allocated to social housing, it is true that in terms of display, this may give the impression of promoting the war on housing. We are at a time when France is going through a housing crisis, with a sharp drop in property construction, major difficulties for the French in accessing property due to the increase in interest rates. This is a measure that can undermine communication.
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