While the difficult examination of the text continues in Parliament, the possibility of a second day of solidarity seems to be ruled out.
The ministers promptly warned as soon as the text of the finance law (PLF) was presented: so it is “perfectible”. In mid-October, in fact, the new Barnier government had only two weeks to prepare the 2025 budget in a context of violent deficit spiral. In an emergency situation, the new executive has struck hard by inserting controversial savings measures into the text to reach the goal of 40 billion in spending cuts for next year.
But since then, parliamentary debate in an explosive political climate and repeated warnings from businesses and other actors, such as local elected officials, have ended up convincing the government to change this first version. In an interview with Echoes this Sunday, the Minister of Economy Antoine Armand, for example, announced that he wanted “attenuate” in exchange, the increase in employers’ contributions on low wages foreseen in the 2025 budget « other efforts » which may concern working hours. This measure, which consisted of reviewing the size of reductions in employers’ contributions to recover up to 5 billion euros, was a serious headache for the Macron camp. Some ministers were also maneuvering to remove it from the 2025 budget. A source close to the matter confirms that the prime minister intends to soften this measure in the final text for which he will take responsibility via 49.3.
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As for the cost-saving measures that will save some of the tariff reduction, things remain unclear. Instead, a source close to Matignon says so « The hypothesis put forward in recent days of establishing a second day of solidarity is not favored »in short, almost buried. It must be said that this song was far from seducing even in the ranks of « common basis ». Some in particular judged that he was guilty of making those who already work work harder….
“Small retreats”
” Furthermore, whispers an advisorthis has the advantage of guaranteeing the victory of the Macronist deputies”which have so far provided strong support to the budget presented by the Barnier team. It is also partly for political reasons that the government would consider “let go” on a certain number of savings expected for the budget of local authorities. The government has in fact included around 5 billion euros in savings on funds intended for municipalities, departments and other regions in the PLF. “We will ease some measures, admits a person close to the government, in particular for the departments”. The departments are in fact in financial difficulty due to the real estate crisis, which has caused one of their main sources of revenue to collapse: transfer taxes against payment (DMTO) or notary fees.
Faced with this fierce opposition in Parliament and in public opinion, a government source confirms that the executive is preparing to give up “small retreats” of this plane shot. In parliamentary debates, the thresholds of 1,200 euros, 1,600 euros or even 2,000 euros of pension per month have been discussed. It remains to be seen which of these thresholds the government will choose.
Interview: Navigating the 2025 Budget and Political Pressures
Editor (Time.news): Thank you for joining us today. We find ourselves in a tumultuous period as Parliament continues to scrutinize the proposed finance law for 2025. To help us unpack this situation, we have with us Dr. Claire Moreau, an expert in government finance and public policy. Claire, given the recent political climate, what do you think of the government’s hasty introduction of potential savings measures in the budget?
Dr. Moreau: Thank you for having me. It’s an unusual move for the government to rush these controversial savings measures into the budget framework, especially knowing how much pushback they might face. We see them trying to tackle an urgent deficit while balancing various stakeholder interests. The decision underscores a desperate approach to ensure fiscal stability at all costs.
Editor: Absolutely. The Minister of Economy, Antoine Armand, has mentioned the need to “attenuate” certain proposals, including the increase in employers’ contributions on low wages. How do you assess the impact of such a measure on businesses and the workforce?
Dr. Moreau: That proposed increase was indeed a significant concern. It could place a heavy burden on small businesses, particularly in a time of economic uncertainty. By scaling back this increase, Armand seems to be acknowledging that a balance must be struck—protecting jobs while still addressing the deficit. However, this leaves many businesses in limbo about what to expect in terms of support and contribution levels moving forward.
Editor: There’s also speculation surrounding the potential establishment of a second day of solidarity to assist in budgetary constraints. How likely do you think this is, given that sources suggest the idea is nearly “buried”?
Dr. Moreau: The opposition to this second solidarity day is telling. Solidarity measures usually carry a sentiment of collective responsibility, but they can be politically unpopular if perceived as an extra burden on workers. It appears that many in the government recognize that the public’s response would not be favorable, especially considering the current backlash against increased taxes and contributions. It seems they’ve quietly decided to drop it, likely to avoid further unrest.
Editor: Interesting point. The article suggests that local elected officials and businesses have voiced considerable concern about the budget. To what extent do you think public opinion influences government decisions in this context?
Dr. Moreau: Public opinion is a crucial factor, particularly when the government is facing such a scrutiny-laden environment. Ministers are highly attuned to concerns from constituents and business leaders. When faced with pushback, the government often recalibrates its proposals to avoid alienating key groups. Maintaining a semblance of support from these stakeholders can be critical for their political survival.
Editor: With all these dynamics in play, do you see a path forward for the government? What should we be watching for in the next few weeks?
Dr. Moreau: The government will likely continue to engage in negotiations within Parliament to amend the budget, focusing on refining contentious policies while trying to maintain fiscal discipline. It will be essential to watch for any further changes to the proposed savings measures and whether they can come to a consensus without inciting public anger. Ultimately, transparency and communication will be keys to navigating this challenging landscape.
Editor: Thank you, Dr. Moreau, for your insights into this complex issue. It seems we are in for an eventful period as the government strives to balance fiscal responsibility with political realities. We appreciate your time.
Dr. Moreau: Thank you for having me. It’s been a pleasure diving into this vital topic with you.