The French government presented, on Thursday 10 October, a 2025 draft budget plan designed, in the words of the Minister for the Budget, Laurent Saint-Martin, to “act quickly and decisively” to redress the deterioration in public finances that has accelerated since the Covid-19 pandemic.
Echoing the announcements made by Prime Minister Michel Barnier (see EUROPE 13494/15), this draft budget plan aims to reduce the public deficit from 6% to 5% of national GDP by the end of 2025. Of this €60 billion budgetary recovery effort, €40 billion will come from spending cuts and €20 billion from tax increases.
To reduce expenditure, a number of spending increases will be limited, such as the rise in social spending, which will be capped at 2.8%. Set up during the energy crisis, the electricity tariff shield will come to an end. In addition, 2,200 jobs will be cut in the civil service, notably in education, but not in the justice and defence sectors.
On the revenue side, Mr Saint-Martin unveiled the “exceptional, temporary, targeted” tax contributions that will be introduced and targeted at: 440 companies with annual sales in excess of €1 billion, with the measure expected to generate €8 billion in 2025 and €4 billion in 2024; the 65,000 wealthiest tax households.
Other compulsory levies will involve an increase in the tax on airline tickets (€1 billion), which will now include private jets.
Warning against the “risk of economies of the European Union being wiped out” by the “interventionism” of international competitors, the Minister for Finances, Antoine Armand, called for a “leap forward”, which will involve a competitiveness agenda at European level. In his view, the 2025 French budget plan is designed to maintain the “credibility” of the signature of the euro area’s second-largest economy, whose fundamentals remain solid, with growth in 2024 forecast at 1.1% of GDP and unemployment (7.3% of the working population) close to its lowest level in 40 years.
Nevertheless, France’s public debt, which is expected to reach 113% of GDP this year, is “colossal” and requires the repayment of 50 billion euros, admitted Mr Armand. According to Mr Armand, this is due to fifty years of budgetary imbalance.
Like seven other Member States, France is the subject of an excessive deficit procedure (see EUROPE 13462/1). It still has to submit its multiannual budget programme at the European level, of which the 2025 budget is the first stage and which will bring the public deficit back below 3% of national GDP in 2029.
To see the French 2025 draft budget plan (in French): https://aeur.eu/f/dup (Original version in French by Mathieu Bion)