The deputies came to the end, during the night from Friday to Saturday, of the first part of the state budget: the initial text of the government was largely reworked, with new taxes galore, which the Assembly must still validate by a general vote on Tuesday.
Shortly before 3:00 a.m., the National Assembly finally completed the examination of the “revenue” part of the finance bill, and the more than 3,000 amendments tabled by the deputies.
A project started on October 21, then interrupted during discussions on the Social Security budget, and resumed on Wednesday in the hemicycle, where the government’s copy was profoundly transformed.
Ultimately, the state deficit forecast for 2025 is reduced from 142 to 85 billion euros, at the cost in particular of a “tax increase of 35 billion”, calculated the minister at the end of the session. of the Budget Laurent Saint-Martin, judging this improvement “largely artificial” because it also derives for 23 billion from the elimination of the envelope intended for the European Union.
“We have not deleted anything at all, we are still in the EU”, agreed the centrist deputy Charles de Courson, general rapporteur of the budget who for his part estimated the new revenues at “12 billion counting”, the rest being “probably Euro-incompatible, or unconstitutional”.
Figure logically contested by the president of the Finance Committee, the Insoumis Éric Coquerel, who retains the “satisfaction” of having “found tens of billions of new revenue” and thus “lowered the deficit to less than 3%” of the GDP.
Acts of rebellion
In fact, the left has rolled out a good part of its program for the last legislative elections. With the help of new taxes on “super profits”, “super dividends”, share buybacks, “large digital companies”, multinationals and even the assets of billionaires.
The government could only note the damage: of the 41 articles in its initial text, a dozen were simply deleted by the Assembly.
And not the least: end the increase in the electricity tax, the increase in the automobile penalty and the surcharge on large companies, each time with the votes of the right and the center, although supposed to support the executive .
Apart from these acts of rebellion, the “common base” was especially conspicuous by its absence throughout the debates, unable to mobilize even during the symbolic vote on the European contribution.
The central bloc even appeared divided over its traditional tax taboo. Thus, the Modem voted to make permanent the surtax on high incomes, which the government only wanted limited to the next two years. Likewise, the Horizons group is initiating a reduction in the research tax credit, another Macronist totem.
Often in the position of arbiter, the National Rally has sometimes tilted the balance to the left. Like Friday to pass a tax on the importation of beef, in order to mark a shared refusal of the European free trade agreement with South American Mercosur.
“Feeling of waste”
At the end of the financial year, there are few reasons for satisfaction for the executive, which managed to maintain the increase in VAT on gas boilers and to introduce by amendment an increase in the tax on plane tickets, at price, however, of several concessions.
It remains to be seen whether all this will have been of any use. The entire “revenue” section must in fact be the subject of a solemn vote in the hemicycle on Tuesday afternoon.
As it stands, this “fiscal smear” is “not voteable as it stands,” said Macronist David Amiel. “Feeling of waste” also for the head of the Modem group, Marc Fesneau, who estimated that the rejection of the article on the EU was enough “to invalidate this budget”.
Conversely, the left “will obviously vote for it”, predicted Mr. Coquerel, wondering about “what the RN will do” after having adopted or abstained on numerous measures.
Several executives of the far-right group, however, made it known off the microphone that their group was moving towards a vote against, particularly given the total amount of the tax increases.
This gives credence to the possibility of a rejection of the text, which would then be transmitted to the Senate in its initial version, without even examining the “expenditure” section of the state budget. On the other hand, if the deputies approve this first part, they will immediately move on to the discussion of the credits allocated to the various missions of the State, with the obligation to reach a conclusion before the deadline of November 21.
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**Interview with Political Economist Claire Lefèvre on France’s Budget Adjustments**
**Interviewer:** Thank you for joining us today, Claire. The recent budget adjustments in France have been quite striking, with a €19.4 billion increase in taxes and €41.3 billion in spending cuts. What does this say about the current state of the French economy?
**Claire Lefèvre:** Thank you for having me. These adjustments indicate a significant response to an economic situation that is increasingly precarious. The government is attempting to address a growing deficit, which was forecasted to be reduced to €85 billion for 2025 from €142 billion. However, the reliance on new taxes and spending cuts will undoubtedly have repercussions not just on businesses but also on everyday citizens.
**Interviewer:** It seems that the National Assembly made major revisions to the original budget proposal. How did the political dynamics play into these changes?
**Claire Lefèvre:** Absolutely, the political landscape is highly polarized right now. The majority of the original proposals were modified or entirely removed, reflecting a coalition of interests among different political factions. Notably, several articles that sought increases in various taxes were removed with the assistance of right and center parties, suggesting that even those who support the government are not aligned on its tax strategy.
**Interviewer:** It also appears that there’s a noticeable division within the centrist bloc, as demonstrated by the votes on high-income surtaxes and the research tax credit. How do you interpret this division?
**Claire Lefèvre:** This division within the centrist bloc signifies a broader ideological split on fiscal policy. While traditionally the centrists would support the government’s initiatives, the current economic climate and public sentiment seem to be pushing them towards more progressive revenue measures. The ongoing debate around these taxes illustrates a growing divergence of priorities even within the government’s supportive factions.
**Interviewer:** The left has introduced some new taxes targeting ’super profits’ and large corporations. What are the implications of these measures?
**Claire Lefèvre:** Introducing taxes on ‘super profits’ and large corporations could serve to stabilize funding for critical public services, especially during turbulent economic times. However, it risks driving away investment or prompting companies to relocate. Balancing these taxes with an incentive structure that encourages growth and innovation is essential, but challenging in practice.
**Interviewer:** Lastly, do you think these budget adjustments could have long-term effects on public sentiment towards the Macron government?
**Claire Lefèvre:** Certainly. If the public perceives these adjustments as beneficial and sees tangible improvements in public services and economic stability, it could bolster support for Macron’s administration. However, if tax increases lead to a rise in living costs without clear benefits, discontent could grow. The sense of ’waste’ and inefficiency often expressed by the public could resurface if these measures don’t translate into visible improvements.
**Interviewer:** Thank you, Claire, for your insights on this complex situation. It will be interesting to see how these budgetary measures unfold in the coming months.
**Claire Lefèvre:** Thank you for having me; it’s a critical moment for France’s economic future.
