2024-11-04 20:00:00
The National Assembly approved on Monday 4 November, with the votes of the left, a profoundly revised version of the “revenue” part of the 2025 Social Security budget, against the opposition of Macronist and right-wing deputies who voted against. The amended text, which provides for between 17 and 20 billion in additional contributions according to deputies, was approved with 126 votes in favour. ” deposit “ and 98 ” against “. The Assembly will thus be able to begin examining the “expenses” part of the text in the evening.
By significantly increasing contributions on capital income or dividends, the left has done so “reasonably released (…) a level of funding for social protection and social security commensurate with needs”welcomed the socialist Jérôme Guedj.
The elect of “basic” the government criticized a text “empty of meaning and of any political and budgetary seriousness”as summarized by François Gernigon (Horizons). “You have created taxes and charges worth almost 17 billion”complained Thibault Bazin (LR) while addressing the elected representatives of the New Popular Front (NFP). “And the victims there are not the rich, they are the working middle classes”he said, criticizing a text that “it doesn’t look like anything anymore”.
Tacit support of the RN
“The debacle is complete for the government! We have transformed the revenue portion of the Social Security budget to serve redistribution and wealth sharing.”greeted ON LFI MP Clémence Guetté, who chaired the session. “There is a majority to govern on the basis of the program of the New Popular Front”, rejoiced his colleague from the North, Aurélien Le Coq.
To obtain this favorable vote, the New Popular Front had to count on the abstention of the National Rally. He also denounced the RN, which had criticized the government’s initial text “the fiscal madness imposed by the left”. But he chose to abstain so as not to end the debate prematurely with the rejection of the party “recipes” would in fact have led to that of the entire text.
This tacit support from the RN allowed the left in particular to obtain, shortly before, a symbolic victory on the pension reform, with the adoption of amendments opposing the reform.
These socialist, rebel and communist amendments, adopted with 178 votes in favor and 76 against, modify an annex to the text, repealing the increase in the legal retirement age from 62 to 64 years. “Let’s focus on the symbol, we will vote for this amendment”announced RN MP Matthias Renault. Budget Minister Laurent Saint-Martin called on the PS not to sink “in demagogy through this amendment”. “Instead, let’s support those who are responsible in this matter by reducing our public deficits”he said.
“Today is a first symbolic step”LFI deputy Manuel Bompard underlined, meeting deputies on November 28, for the examination of a bill from the LFI which also proposes to repeal the reform, which will have some chance of passing.
Interview between Time.news Editor and Jacques Dupont, Economic Policy Expert
Time.news Editor (TNE): Good evening, Jacques. Thank you for joining us today. There’s been a significant development in the French National Assembly regarding the 2025 Social Security budget. Could you shed some light on what this means for the financial landscape in France?
Jacques Dupont (JD): Good evening! Certainly. What we witnessed on November 4th was a substantial shift in the approach to funding social security in France. The National Assembly approved a revised revenue part of the budget, which is expected to raise between 17 to 20 billion euros in additional contributions. This represents a clear pivot towards increasing taxes on capital income and dividends, which had been a contentious point among lawmakers.
TNE: It seems like the left is asserting its influence now. How did they manage to push this through, especially against a backdrop of opposition from the Macronist and right-wing deputies?
JD: The left coalition, particularly the New Popular Front (NFP), played a strategic game. They rallied support from other left-wing factions and benefited from the abstention of the National Rally (RN). This tacit support from the RN was crucial; they chose not to reject the budget outright, allowing the left to secure a majority. It’s a fascinating example of unconventional alliances in politics, where the primary goal was to redefine taxes and redistribute wealth.
TNE: That’s an interesting point. How do you view the criticisms from opposition figures, like Thibault Bazin from LR, who argued that these measures will adversely affect middle-class workers rather than the wealthy?
JD: Critics like Bazin highlight a legitimate concern. The increase in taxes on capital income could indeed squeeze the middle class, as they are often caught between the wealthy and social welfare needs. However, proponents like Jérôme Guedj from the socialist party argue that the funding increase is necessary for social protection and addresses long-term fiscal sustainability. The real question is whether this approach will yield the promised social benefits without overburdening those who are already economically fragile.
TNE: Speaking of economic sustainability, the government’s approach has been labeled as ’empty of meaning’ by certain ministers. What does this say about the overall political climate in France, particularly regarding fiscal responsibility?
JD: It reflects a broader polarization in French politics. Critics from the Macronist camp argue that such sweeping measures lack practical grounding and may destabilize the economy. This division suggests a crisis in consensus on fiscal policy in France, and moving forward, finding common ground will be challenging. The overarching concern is whether this will lead to long-term economic stability or exacerbate existing tensions.
TNE: The supporters of the new budget claim it represents a move towards wealth sharing. Do you think this policy shift will resonate with the electorate, particularly with upcoming elections?
JD: The left’s rhetoric around redistribution resonates strongly with certain segments of the electorate, especially those feeling the pinch of rising living costs and economic inequality. However, the success of this initiative will depend on how effectively they can communicate its benefits and manage the fallout from opposition criticism. A delicate balance of social empathy and economic pragmatism will be essential to win voter support.
TNE: Thank you for your insights, Jacques. It seems we are entering a complex yet crucial period in French economic policy. Any final thoughts on what this could mean for the future?
JD: We are definitely at a crossroads. The outcome of this budget approval might shape not only the economic landscape for 2025 but also influence the political dynamics leading up to the next elections. If the left can successfully implement their agenda and demonstrate tangible improvements in social welfare, they could solidify their position. Conversely, if challenges arise, it might fuel opposition narratives against them. The next few months will be critical.
TNE: Thank you again for your time, Jacques. We’ll be sure to stay updated on these developments.
JD: My pleasure! Thank you for having me.