Posted Jan 5, 2023, 6:34 PMUpdated Jan 5, 2023, 6:45 PM
For three years now, each greeting ceremony has been an opportunity for Bruno Le Maire to highlight the length of his master’s degree at Bercy. The 2023 vintage, which took place this Thursday, was no exception to this rule. “Stability reigns”, underlined the great treasurer greedily.
For the last time ? While the rumor gives him leaving for the IMF next year, the host of Bercy did not sulk his pleasure, remaining an hour in the room to shake all the hands of economic actors who presented themselves. By presenting in passing a roadmap for the year 2023 which boils down to “three major challenges”.
There is one that has been the same since its arrival on the banks of the Seine in 2017, “the restoration of our public finances”. “There is in France an intoxication of public spending”, launched Bruno Le Maire, warning against “the hangover which has a name, interest rates”. At the end of last year, France’s 10-year borrowing rate exceeded 3% (before falling) for the first time in fifteen years.
Budget deja vu
Faced with this, Bruno Le Maire promised “a new method”. The government will launch this month of January an “annual review of public expenditure”, which is intended to concern both that of the State and that of the social sphere or local communities. Alongside this, “Public finance meetings” will also be organized in February, which “will bring together economists, international witnesses, representatives of the economic world, parliamentarians, local elected officials”.
The promised novelty has a little taste of warmed up. In 2021, Bercy had already brought together a commission of experts and elected officials chaired by Jean Arthuis around the question of the debt, which had resulted in a report. As for public spending, there are countless documents filled with recommendations, in particular CAP 2022 ordered in 2018 during Macron’s first five-year term. In the summer of 2022, Bruno Le Maire had also asked a few Renaissance deputies led by Daniel Labaronne to make proposals, quickly buried in the context of the examination of the 2023 budget.
New economic paradigm
“The objective is different, we do not want to produce new reports but results that we will decline year after year, we explain at Bercy. The macroeconomic framework has changed a lot in recent months, particularly with rates at 3%. We must take this new paradigm into account to see how to achieve the objective assigned by the Head of State of a return of the deficit to 3% of GDP in 2027.
Concretely, these Public Finance Meetings must “present the first structural savings projects”, according to Bruno Le Maire, by focusing on the experiments already carried out abroad or by probing the IMF or the European Commission.
As for the review of public expenditure – an exercise which is intended to be repeated each year -, the conclusions are expected at the beginning of April “to feed the parliamentary and budgetary work”, according to the minister, and to be integrated into the preparation of the 2024 budget. well at Bercy as in the ranks of the majority, we have in the viewfinder housing expenses and those related to employment aid. France’s skills deficit is particularly ticking.
bill in the summer
This public finance project will have to be carried out at the same time as the second “major challenge” identified by Bruno Le Maire, that of industrial relocation. “Our objective is for France to become the leading nation for green industry in Europe,” said the minister, again promising a bill that could be presented at the very beginning of the summer.
Five working groups – where we find parliamentarians, business leaders and representatives of associations, headed by the chairman of the Economic Affairs Committee Guillaume Kasbarian – have been set up to feed the text. This should simultaneously speed up the authorization process for industrial sites, promote national public procurement and redirect savings towards green and innovative projects.
Bruno Le Maire also insisted on the need to “create a more attractive fiscal environment for green industry”. This ambition should not, however, come up against the first challenge of the public deficit, and a further sharp reduction in production taxes does not seem to be on the agenda. “This will be done at a constant envelope. We still have to identify which tax tools should be activated, perhaps tax credits like the Americans do, but in any case it will be guaranteed on the elimination of ‘brown’ tax loopholes for an equivalent amount, “decrypts a ministerial source.
Two major long-term challenges, then, and a third that promises to be much more burning and urgent, that of inflation. “The conditions are met for inflation to stabilize and then decline during 2023”, argued Bruno Le Maire.