After having put an end to the “whatever the cost” health, the executive is preparing to disconnect the “whatever the cost” energy. While the deputies of the various commissions of the National Assembly attacked this week the examination of the “purchasing power package”, which mobilizes more than 20 billion euros for households in a context of rising prices, the government prepares minds for a gradual reduction in aid from 2023.
“We must move from general mechanisms to more targeted mechanisms”declared the Prime Minister, Elisabeth Borne, Saturday, July 9, on the sidelines of a trip to the Economic Meetings of Aix-en-Provence (Bouches-du-Rhône). “We are in the heart of the peak of inflation which will last for several more months, so it is necessary to switch to more targeted support”, added for his part the Minister of the Economy, Bruno Le Maire, the same day, recalling “with great seriousness” the strained situation of public finances.
Since autumn 2021, nearly 50 billion euros have been released to support household purchasing power, taking into account the “package” soon to be examined in Parliament. Either one of the highest amounts in Europe in absolute value, according to the European think tank Bruegel.
The executive has already started this movement by announcing, a few days ago, to replace the discount of 18 euro cents per liter at the pump with new aid distributed subject to income, which will be less expensive: 2 billion euros per year, compared to 800 million euros per month. A similar approach must be adopted in 2023 for the various “tariff shields”, put in place in October 2021 and which cap electricity and gas prices until the end of the year.
These two measures are by far the most expensive of the arsenal deployed to support households in the face of soaring prices: nearly 20 billion euros since autumn 2021 to absorb the rise in gas and electricity prices alone. electricity and make it painless for households, even if the bill for public finances will be spread over several years.
Degraded public finances
After two years of health crisis, public finances are in a degraded state, argues the government, as recently pointed out by the Court of Auditors and the High Council of Public Finances. And if the European Commission has suspended the stability pact until the end of 2023, it is still waiting for Paris to send it its multi-year public finance trajectory, supposed to explain how France intends to bring the public deficit below 3% of gross domestic product. (GDP) in 2027.
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