2023-12-14 20:24:09
Published on Dec 14 2023 at 7:18 p.m. Updated Dec 14 2023 at 7:24 p.m.
Should the government already bring out the heavy artillery to meet its budgetary objectives at all costs? This Thursday, the Prime Minister, Elisabeth Borne, once again used article 49.3 of the Constitution to adopt the first part of the finance bill (PLF) for 2024, focused on revenue. The voted text still aims to reduce the public deficit from 4.9% of GDP in 2023 to 4.4% next year, but the executive is creating levers which could allow it to achieve an objective which already seems threatened .
In fact, clouds darken the budgetary sky. The French economy is preparing for a sluggish recovery in 2024, and the level of growth expected by the government for next year (+1.4%) already seems out of reach given the forecasts published Thursday by INSEE. This risks depriving public accounts of valuable tax revenue.
Savings to find
In mid-November, the Minister of Finance, Bruno Le Maire, affirmed that he was “ready for new additional decisions in terms of public spending if the level of growth is not what we expect”. We are not there yet, but Bercy is opening the door to solutions that could allow it to stay the course. Potential savings linked to the decline in energy prices – whether gasoline or electricity.
First there are prices at the pump which are flattening after their peak in September. The government is no longer as worried about an explosion of anger from motorists. He therefore allows himself to condition the sending of the “worker fuel allowance” of 100 euros to a clear rebound in the price of a liter of gasoline – this is what Bruno Le Maire announced this Thursday. This last minute requirement could allow it to save 600 million euros if this reduction is ever confirmed – which however remain budgeted, just in case.
Potential budget gains
But the real good deal, for Bercy, could come from the electricity market. According to the latest government projections, the wholesale prices of electrons have fallen sufficiently in recent months for the regulated tariffs (TRVE) which will be proposed by the CRE (Energy Regulatory Commission) for application in the 1st next February fall into line.
Compared to the price currently in force, the increase would be contained around 2 or 3%. The government would thus have no difficulty in respecting its promise of an increase in the French electricity bill “less than 10%”.
Better still, we are already rubbing our hands at Bercy: while remaining below the threshold of the 10% maximum increase in the promised price, it would become possible to gradually restore taxes on electricity.
Proof that the idea has already gained ground, an amendment allowing the TICFE (domestic final consumption tax on electricity) to be increased by decree from next January was introduced by the government in the draft budget. This tax was lowered at the beginning of 2022 to the minimum level authorized in the European Union, i.e. 1 euro per MWh for individuals (0.50 euros for businesses) compared to 32 euros before the energy crisis (26 euros for businesses). The executive is giving itself the possibility of raising it in stages finally from 2024.
Around a hundred euros on average for each household
The Bercy calculation is simple. The natural evolution of the electricity bill next February could well be “only” 25 to 40 euros per year. If we raised the TICFE to 15 euros per MWh, or half of its normal level, the increase would reach around 130 euros per year… or the famous 10% ceiling that the government is committed to respecting. This would certainly cost around a hundred euros on average for each household. But this could potentially bring in several hundred million euros, or even up to 4 billion.
“We announced that we wanted to release exceptional devices. By definition, there will be a budgetary gain, but it is still impossible to evaluate it at the moment since it will depend on the price of electricity,” we specify at Bercy.
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