While 20 billion additional savings were announced in the 2025 budget, the Prime Minister is rejecting the option of raising taxes to raise state revenue.
France’s budgetary recovery will involve spending rather than revenue. This was reaffirmed by Gabriel Attal on the set of France 5 on Friday evening, two days after announcing 20 billion euros in savings in 2025, to be added to the 10 billion already planned for 2024. “In recent months, we have noticed that there is an economic slowdown everywhere in the world, especially in Europe, which affects our neighbors more than us but which also affects us, recalled the head of government. We have revised down our growth forecast, which is much lower than the German losses. Much tougher than us.”
“When we have less revenue, we have to adapt spending.”
Since his arrival at Bercy in 2017, Bruno Le Maire has made it a point to avoid any tax increases and the former Minister of Public Accounts wants to continue this course. “What will affect growth is if we have the reflex that often exists in our country to raise taxes,” he speculated. “The surest way to slow growth is through taxes.”
More work for more social and tax revenue
The Prime Minister emphasized the level of taxation that remains significantly higher in France than our neighbors and that reducing it could have beneficial effects, for example the corporate tax that fell from 33 to 25% in 2017. “We collect more corporate tax at the rate of 25% than we collected at the rate of 33%,” he explained. When you lower taxes when they are too high, you allow economic activity to grow. By lowering certain taxes, you allow. Economic activity develops and you have more activity.”
To reduce the deficit and balance the budget, Gabriel Atal wants to focus specifically on employment. “If we had the same employment rate as our German neighbors, the same proportion of people in the job market, we would have no problem balancing our budget,” he says. The more French people who work, the more social and tax income you have. ” Although he does not question the foundations of the French social model, he believes that it may be “less expensive and more effective” in this respect:
“The aim of the social model should be to support the French when they are having a hard time, but it should also be to encourage people to return to activity and work.”
While negotiations are underway between the social partners on this topic, the head of government has left the door open to reducing the duration of unemployment insurance compensation. At the same time, he hopes that solutions will emerge to promote the employment of seniors.
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