The deputies concluded, in the night between Friday and Saturday, the first part of the state budget: the government’s initial text has been extensively reworked, with new taxes galore, which the Assembly will still have to validate with a general vote on Tuesday.
Just before 3am, the National Assembly finally concluded its examination of the “revenue” part of the finance bill and the more than 3,000 amendments presented by deputies.
A project that began on October 21st, then interrupted during the discussion on the Social Security budget, and resumed on Wednesday in the hemicycle, where the government copy was profoundly transformed.
Ultimately, the forecast of the state deficit 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 budget session Laurent Saint-Martin . judging this improvement to be “largely artificial” because it also derives 23 billion from the elimination of the allocation intended for the European Union.
“We have not canceled anything, we are still in the EU”, agreed the centrist MP Charles de Courson, general rapporteur of the budget, who for his part estimates the new revenues at “12 billion”, the rest will be “probably Euro-incompatible or unconstitutional” .
Figure logically contested by the president of the Finance Commission, Insoumis Éric Coquerel, who retains the “satisfaction” of having “found tens of billions of new revenues” and thus “lowered the deficit to less than 3%” of GDP.
Acts of rebellion
In fact, the left presented 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 wealth of billionaires.
And last but not least: end the electricity tax increase, the car fine increase and the surtax on big business, every time with the votes of the right and the center, even if they should support the executive.
Beyond these acts of rebellion, the “common base” was conspicuous above all by its absence in the debates, unable to mobilize even during the symbolic vote on the European contribution.
The central bloc even appeared divided over its traditional fiscal taboos. Thus, the Modem voted to make permanent the surtax on high incomes, which the government wanted limited only to the next two years. Likewise, the Orizzonti group is behind the initiative to reduce the research tax credit, another Macronist totem.
Often acting as arbiter, the National Rally has sometimes tipped the scales to the left. Like Friday to pass a tax on beef imports, to mark a shared rejection of the European free trade agreement with the 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, with an amendment, an increase in the tax on airline tickets, but at the price of several concessions.
It remains to be seen whether all this will have been of any use. The entire “revenue” section will in fact have to be the subject of a solemn vote in the chamber on Tuesday afternoon.
On the contrary, the left “will obviously vote in favor”, predicted Coquerel, wondering “what the RN will do” after adopting or abstaining numerous measures.
However, several leaders of the far-right group have made it known on the microphone that their group is moving towards a vote against, especially in light of the total amount of the tax increase.
This gives credence to the possibility of a rejection of the text, which would then be sent to the Senate in its initial version, without even examining the “expenditure” section of the state budget. If, however, the deputies approve this first part, they will immediately move on to the discussion of the credits intended for the various state missions, with the obligation to reach a conclusion by the deadline of November 21st.
Interview between the Time.news Editor and Budgetary Expert Dr. Elise Moreau
Time.news Editor: Good morning, Dr. Moreau! Thank you for joining us today. It’s been quite a busy week in the National Assembly with the discussions around the state budget. Can you provide a brief overview of what transpired during the budget debates?
Dr. Elise Moreau: Good morning! Absolutely. The National Assembly wrapped up its scrutiny of the revenue portion of the state budget late Friday night into Saturday. This included an extensive review of the government’s initial proposal, which saw over 3,000 amendments introduced by deputies. The new budget is significant because it introduces a range of new taxes, with a general vote scheduled for Tuesday for final validation.
Time.news Editor: It sounds like there was quite a contentious atmosphere. What were some of the critical outcomes of these discussions?
Dr. Elise Moreau: One of the key outcomes was the reduction of the projected state deficit for 2025 from €142 billion to €85 billion. However, this was achieved through what some critics, including Minister Laurent Saint-Martin, have termed “largely artificial” means. Notably, €23 billion of this reduction derives from eliminating the allocation meant for the European Union.
Time.news Editor: That certainly raises eyebrows. The debate involved various factions, including the left, which proposed several new taxes targeting large corporations and wealthy individuals. How do you assess the significance of their proposals, like taxes on ”super profits”?
Dr. Elise Moreau: The left’s proposals signify a shift towards addressing wealth inequality and corporate taxation. They wish to capitalize on what they perceive as “super profits,” especially from large digital companies and multinationals. However, the implementation of such taxes is fraught with legal and economic complexities. There are concerns, as pointed out by centrist MP Charles de Courson, that many of these new revenues might be Euro-incompatible or even unconstitutional.
Time.news Editor: There appears to be a notable division within the central blocs and parties as well. Can you elaborate on that?
Dr. Elise Moreau: Yes, absolutely. The central bloc has significantly lagged in unity on fiscal matters. For instance, the Modem party voted to make the surtax on high incomes permanent, contrary to the government’s desire to limit it to the next two years. This kind of division can hinder coherent policy-making and reflects broader discontent within these traditional parties regarding the government’s fiscal policies.
Time.news Editor: The National Rally also played a role in the debates. How did their actions influence the outcomes?
Dr. Elise Moreau: Interestingly, the National Rally has acted as an unexpected upholder of certain left-leaning policies. They even tipped the scales to support a tax on beef imports, showing a shared aversion to certain trade agreements, such as the one with Mercosur. Their ability to navigate between the left and right underlines the fractious nature of the current political landscape.
Time.news Editor: As these discussions move forward, what should we expect in terms of the final approved budget? Do you foresee any potential challenges?
Dr. Elise Moreau: The upcoming general vote will be critical. There’s still a risk of further amendments and disagreements among various factions during the final stages. Challenges will likely arise concerning the practicality of implementing new taxes and the ongoing critiques regarding revenue estimates. The overarching aim of maintaining a deficit below 3% of GDP could also be difficult to achieve amid these expansive tax proposals, especially with potential pushback from various political sectors.
Time.news Editor: Dr. Moreau, thank you for your insights today. It appears we are on the precipice of a fascinating, yet complex financial landscape. I look forward to seeing how these developments unfold!
Dr. Elise Moreau: Thank you for having me! It’s going to be an interesting time ahead, and I’m eager to see how this plays out in the coming days.