2024-11-06 12:48:00
A final blow to try to limit the public deficit in 2024. Less than two months before the end of the year, the government has decided to adopt new economic measures relating to the current financial year. This is partly the objective of the end-of-management bill examined on Wednesday 6 November by the Council of Ministers, and immediately sent to Parliament, which plans to examine it in the session of 19 November.
Despite the size of the text – 187 pages with annexes – and the lack of a majority in the National Assembly, the government is counting on a very rapid adoption of this bill. “It is necessary that it be promulgated at the beginning of December because, in addition to cancellations, it also opens up new credits, in particular to guarantee the remuneration of public employees or finance military support for Ukraine,” we point to Bercy.
Despite the slippage of public finances, Prime Minister Michel Barnier chose not to present to Parliament a real financial law of amendment, which would have allowed the adoption of emergency fiscal measures, applicable starting from 2024. Otherwise, the end of the law of management, a new type of law created in 2021, allows for some late savings. In this context, the State intends to definitively cancel 5.6 billion euros of already voted credits. These are mainly the funds already temporarily frozen during the summer by Gabriel Attal when he was in Matignon. All ministries, or almost all, are worried.
Unavoidable expenses
“With these cancellations we are going to the maximum of what is technically possible” ensures World Laurent Saint-Martin, Minister of Budget. A response to those, especially among Macronists, who suspect that the new government will blacken the public accounts for 2024, to concentrate recovery efforts on 2025.
At the beginning of the year, when the first signs of budget slippage were confirmed, the government had already canceled credits for 10 billion euros. Then 16 billion euros were put “in reserve” after the dissolution of the Assembly. “It is not possible today to completely cancel this reserve, but between what is canceled and what is postponed to 2025, three quarters of these 16 billion will not be consumed in 2024”, underlines Bercy, who interprets it as a sign of the Barnier team’s desire to save.
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Interview Between Time.news Editor and Economic Expert
Editor: Good afternoon, and welcome to Time.news. Today, we’re diving deep into France’s current economic measures as discussed recently in Parliament. With us is Dr. Sophie Duval, a prominent economist and expert on fiscal policies. Welcome, Dr. Duval!
Dr. Duval: Good afternoon! Thank you for having me.
Editor: Let’s jump right in. Prime Minister Michel Barnier has presented a bill aimed at limiting the public deficit as we approach the end of the year. What are the key aspects of this bill?
Dr. Duval: The bill, which is over 187 pages long, focuses primarily on managing the current financial year’s budget. It introduces new credits, particularly aimed at ensuring public employee salaries and continuing military support for Ukraine. It showcases the government’s commitment to maintaining essential services despite the challenging financial landscape.
Editor: It seems like there’s a significant urgency behind this bill. Why does the government want it passed by early December?
Dr. Duval: There are a couple of factors. Firstly, the financial year is ending soon, and any adjustments need to be in place to effectively manage resources. Secondly, the government is concerned about maintaining public sector stability, especially as we head into winter, a critical time that can affect social services and public morale. By securing these funds, they are aiming for a smoother transition into the new year.
Editor: The lack of a majority in the National Assembly seems like a hurdle. How is the government planning to overcome this obstacle?
Dr. Duval: Yes, that’s quite significant. The government is likely leveraging its relationship with certain political factions and also appealing to public sentiment around essential services and national interests, such as military support. This approach could sway some representatives to support the bill despite the lack of a formal majority.
Editor: In the meantime, you mentioned the slippage in public finances. How does this bill address that?
Dr. Duval: Unlike a traditional amendment bill that would thoroughly reassess the financial strategy, this bill takes a more reactive approach. It attempts to manage immediate shortfalls and establish temporary measures instead of enacting a comprehensive fiscal overhaul. While this might stave off immediate challenges, it leaves the longer-term financial strategy somewhat unaddressed.
Editor: What are the potential implications of passing this bill without a solid long-term financial plan?
Dr. Duval: Passing this bill could lead to short-term stability but raises concerns about long-term sustainability. If we’re only focusing on immediate fixes without addressing the root causes of the public deficit, we might find ourselves in a similar or worse position down the line. Additionally, taxpayers may eventually feel the pressure of short-term solutions that lack foresight.
Editor: In essence, while the government is acting with urgency, there could be repercussions if this trend continues.
Dr. Duval: Exactly. The government needs to prioritize not just reactionary measures but also create a cohesive strategy for post-2025 that can address fiscal health sustainably.
Editor: Thank you for your insights, Dr. Duval. It’s clear that navigating these economic challenges is going to require not just quick action but also careful planning for the future.
Dr. Duval: Thank you for having me. It’s always a pleasure to discuss these critical issues.
Editor: And thank you to our audience for tuning in to Time.news. Stay informed as we continue to follow these developments closely!
