Christophe ENA / AFP
What say the choices considered by the executive (Bruno Le Maire and Emmanuel Macron here in 2023) to get the debt.
Politics – Bruno Le Maire of battles. While INSEE formalized the extent of the slippage in France’s public deficit on Tuesday 26 March, and the government finds itself at the center of criticism from the opposition, the economy and finance ministers are looking for ways to improve the situation.
Surprisingly, Bruno Le Maire seems attached to controlling public spending, a key lever used by the executive to plug the growing hole. The government – which is meeting in a seminar this Wednesday morning – could once again reduce credits for specific areas of action, as it has done on thermal renovation or apprenticeship contracts, to save 10 billion euros.
Problem: Account is not red, but scarlet. According to estimates, the executive will now have to find five times more for the slippage confirmed on Tuesday. All this, with the sword of Damocles as the rating agencies who must unveil their reports in early April. So a delicate situation for the government, which forces it to open up” All discussions », according to Bersi’s boss. Really? No.
Don’t touch taxes (nor retirees).
In fact, the executive is not inclined to review the principles followed since 2017. On taxes, first of all: the Minister of Economy confirmed on Tuesday, a few seconds after the INSEE publication, that there is no question of an increase. The end of the disallowance to them is particularly opposed by Yael Braun-Pivet and François Bairro, who follow the left in urging more taxes on companies paying superprofits or “super dividends”.
” We can absolutely save on public spending without digging into the pockets of the French. I am totally opposed to any tax increase on our compatriots », decided Bruno Le Maire on RTL, anxious not to break with the line that has guided the executive since 2017: no tax increase. Even if it concerns well-being the most.
In this sense, there is another route vigorously rejected by the executive: which would be tantamount to touching the wallets of retirees. Or, in any case, to de-index their pensions for inflation. Budget Minister Thomas Cazeneuve mentioned the idea in early March… before it was torpedoed by Emmanuel Macron himself. “ We must stop taking measures that are not even mentioned, unless you want to lose an election… », breathed the President of the Republic during the Council of Ministers that followed this outing, premature in his eyes.
Return of Social VAT
Since then, we can easily understand that the government is afraid of denying itself… what’s more in the eyes of its electorate, who are rather old and well-off. In 2022, 40% of retirees voted for Emmanuel Macron in the presidential election compared to 18% for Marine Le Pen. So it is difficult for the presidential camp to remove them on the eve of a thorny European campaign.
No problem. Contrary to these various proposals, Bruno Le Maire has already announced an idea that he prefers to make money straight while improving the net pay of the French. On the track, the famous social VAT, has therefore been a favorite of the right for years. According to the Economy Minister’s proposal, this would include reducing employee and employer contributions while increasing the VAT rate to implement consumption tax.
A way to improve workers’ net pay while collecting 60 billion euros, according to Bersi’s tenant calculations… What more could you ask for in a Macroni? The fact is that this stone has two blows, but the opposite: increase in price, for everyone. The increase in VAT will really affect all households from the richest to the most ordinary. Worse, they can have a detrimental effect on the most uncertain given that the share of income spent on consumption is so high. While inflation is crushing their purchasing power. Not easy.
Targeted regions and social costs
Not only that. Among other avenues defended by the government, we find two fundamentals of Macronism: making contributions to communities such as eliminating the housing tax and cutting certain social spending.
Regarding the first point, Bruno Le Maire and Emmanuel Macron prepare the mind in small steps. A caution that can be explained, in particular, by the reluctance of these communities to put their hands in the pot, who complain of insufficient support and consideration by the government.
They don’t have “There’s no reason to join” To fill the state deficit, warned the powerful Association of French Mayors (AMF) on Tuesday, explaining the fact that regions and other town halls have already made enough efforts such as: “ The cumulative reduction in the overall operating grant (the main grant from the state to the communities, editor’s note) in constant euros represents an effort of 70 billion euros since 2014.
Finally, the government maintains its recipe that includes saving on social spending. After doubling the arrears payable by patients on medicines (from March 31), medical transport or medical consultations, many items of expenditure, from sick leave to long-term illnesses, are in the viewfinder. Not to mention unemployment insurance, which could once again suffer a turn of the screw. In short: we can’t change a system that doesn’t win as much.
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