On Wednesday 28 September, the French finance minister, Michel Sapin, presented the draft French budget for 2017, which maintains the commitment made at European level to bring the nominal government deficit down to 2.7% of GDP.
Speaking to the press, Sapin stressed that his country would stick to this commitment. He said that what had been deemed highly unlikely (Ed: by the French High Council of Public Finances) would be proven if all parties started to show the same budgetary rigour that they had shown.
The budget, the French government's last before the presidential elections, retains the hypothesis of growth of 1.5% of GDP in 2017, whilst the government indebtedness ratio will stand at 96.0% of GDP by the end of 2017, unchanged compared to the forecast for 2016. Sapin said that although Brexit would ultimately have negative effects for the British economy, the impact of the referendum for the eurozone in France next year is likely to be less than initially anticipated. "There has been no financial panic and economic studies show that the economic actors did not end up overreacting", he said.
A sum of €7 billion in additional resources will be allocated to pay for the most urgent priorities, which are education (€3 billion), security (€2 billion) and employment (€2 billion). Sapin nonetheless stressed efforts to get on top of the public expenditure during the current five-year period. Whilst expenditure rose by 3.6% a year between 2000 and 2012, it grew by 1.3% of GDP between 2013 and 2017. The minister explained that due to the involvement of all administrations and the low level of debt interest charges, they succeeded in making €46 billion in savings between 2015 and 2017.
The year 2017 marks the final deployment of €40 billion in support measures for business, particularly in the form of tax credits and investment aid. The creation of withholding tax for companies from 2018 onwards, a minor revolution in France, has also been confirmed. Lastly, the French government highlighted a further billion-euro cut in income tax, which will help 5 million households. (Original version in French by Mathieu Bion)