“Everyone will do their part”: Michel Barnier wants a “fair” and “balanced” effort on the 2025 budget

This is a real test for Michel Barnier. Even though he will present his 2025 budget project on Thursday evening, which includes 60 billion in savings, the Prime Minister wants the effort “to be fair” and “balanced”.

“We will ask for an effort of 60 billion. I want it to be fair and balanced (…) Everyone will do their part, but we will retain the means to do what I said,” he declared in detail on the sidelines of a trip to Poitiers (Vienna). He reiterated that he wanted to “demand an effort from a certain number of actors”, such as “very large companies” and the richest families.

A “perfectible” budget.

“The attractiveness and credibility of the French signature must be preserved,” he also said. But this budget project, which will have to be discussed by Parliament in the autumn, “will be perfectible”. “I had to build it in two weeks. It is not possible to do everything well in such a short time. Parliament will be able to improve it,” said the Prime Minister. “We have already made adjustments and amendments, we have others that will be made via government amendment during the (…) budget discussion,” he added.

“We cannot sacrifice the future of our children, continue to pay blank or blank checks on their heads, neither for the budget, nor for ecology,” argued the head of government, anxious to fill the deficit, which should reach 6.1% of GDP in 2024, very far from the 3% requested by Brussels. Aware of being “at the head of a minority government with a relative majority (…) without complacency” which, at times, is torn apart, he said “he hopes to convince you” to “support him”.

Prepared “in extreme urgency” and presented with an unprecedented delay in a calendar disrupted by early legislative elections, the budget project plans to achieve two thirds of the effort, or around 40 billion euros, thanks to spending reductions. The State will be the largest contributor, for an amount of 20 billion euros. Public employees are in the crosshairs, while ministries will have to make 5 billion in savings available, in addition to freezing credits. Social security must release 15 billion, in particular through the deplored postponement of pension indexation for six months to 1 July (for 4 billion).

Help for hiring apprentices will take a hit, as will tariff cuts. This increase in labor costs is criticized by Medef, the main employers’ organisation, which sees it as a threat to the competitiveness of French businesses and “hundreds of thousands of jobs”. It is also planned to transfer part of the reimbursements for medical visits to supplementary health insurance and to reduce the contribution of health insurance to the financing of sick leave.

Local authorities, accused by the previous government of having increased costs, are being asked to participate in the 5 billion euro operation. They hope to be able to influence this drainage during the parliamentary debate. Tax increases of 20 billion euros are also expected. A turning point made in the name of “fiscal justice”, after seven years of aggressive tax reduction, in a country still a champion of deductions and compulsory spending.

The richest 65,000 tax families (or 0.3% of the total) will pay an “exceptional” surcharge that would bring their minimum tax rate to 20%. And 300 companies whose turnover exceeds one billion euros will pay more than the 25% tax rate for a year or two. Defending himself from any “fiscal shock”, Prime Minister Michel Barnier promised to spare “the most vulnerable” and “those who work”