On Wednesday 27 September, the French government presented its finance bill for 2024, which aims to reduce the deficit from 4.9% of national GDP in 2023 to 4.4% in 2024 in order to bring it back into line with the Stability and Growth Pact by 2027, i.e. to 2.7% of GDP.
Assuming GDP growth of 1.0% in 2023 and 1.4% in 2024, the French authorities are announcing a €16 billion reduction in public spending next year, of which €10 billion will come from the end of the tariff shield introduced to tackle the energy crisis last winter. Nevertheless, a fuel allowance (€100 per vehicle for 6 months) will be maintained and targeted at the poorest half of workers. Furthermore, certain social benefits (minimum social benefits, pensions) will be indexed to inflation, which is expected to reach 4.9% in 2023.
The French government forecasts that public debt will stagnate at 109.7% of GDP in 2023 and 2024 before falling to 108.1% of GDP in 2027. With interest rates rising (above 3% on ten-year bonds), the French debt burden is expected to rise to 74 billion in 2027.
At the same time as this budgetary consolidation, the French government intends to free up room for manoeuvre to invest in the sovereign sector (army, justice), education and the green transition. “We categorically reject austerity. To create growth, we need investment”, declared finance minister Bruno Le Maire when presenting France’s draft budget plan.
The ‘France 2030’ plan, designed to accelerate the green and digital transitions and increase the country’s economic sovereignty, will receive €7.7 billion in 2024. Among the measures highlighted are an increase in the ‘MaPrimeRenov’ budget to €5 billion to help the French improve the energy efficiency of their homes, support for the green transition in agricultural sectors and the development of low-carbon hydrogen production. From November 2023, a €100/month leasing scheme will be introduced for the purchase of electric vehicles manufactured in the EU.
In the field of employment and social affairs, the French authorities are announcing the creation of ‘France Travail’, a reform of support for people receiving the minimum income benefit (RSA) and aid for vocational training in companies.
See the finance bill for 2024 (in French): https://aeur.eu/f/8rg (Original version in French by Mathieu Bion)