2024-10-10 04:20:00
Margaux Fodéré // Photo credit: Magali Cohen / Hans Lucas / Hans Lucas via AFP
06:20, October 10, 2024
It’s the big day for the government: after weeks of waiting and speculation, the budget for 2025 will be presented this afternoon to the Council of Ministers. We will therefore finally know the details of the 60 billion euros in savings planned by Bercy to reduce the public deficit to 5% of GDP next year. But as it stands, this budget should mainly serve to stop the hemorrhaging of public finances, rather than to address the problem in depth.
It is an emergency budget, with easy solutions such as increasing taxes, notes a public finance specialist. A short-termist logic is also what Mathieu Lefèvre, Renaissance deputy for Val-de-Marne, retains.
Tax increase
Because to stop the hemorrhaging of public finances, the Prime Minister warned: there will be tax increases for certain businesses and certain taxpayers. But be careful of the counterproductive effects, warns the elected official: “The copy, as it is presented at the moment, it puts a little burden on taxes. Taxation is a return in year n +1, but it could be after less revenue because activity will contract.”
Above all, the slippage in the public deficit is not just a simple moment of confusion, the debt increased by more than 900 billion euros between 2017 and 2023.
“If there must be an effort, it must first relate to the expenditure part”
In other words: the recovery of public finances will inevitably involve structural reforms, making it possible to reap several billion euros in savings. Charles-Henri Colombier is an economist at the Rexecode Institute: “The announcements that we have seen in recent days leave quite a lot of room for measures of a rather temporary nature, which can certainly reassure the markets in the very short term, but which do not resolve the problem of a return to a deficit of less than 3% of GDP And therefore if there must be an effort, it must first relate to the expenditure part.
To reduce long-term expenses, many experts recommend better management of health costs, but also a review of the pension system.
1728541258
#budget #emergency #budget
