Faced with inflation, should public support be concentrated on the most modest? This is the topic that is rising today. At the end of the 22nd Economic Meetings of Aix-en-Provence, Sunday July 10, the Circle of economists thus threw a stone into the pond by proposing to group together the measures to support purchasing power in a single check, “for households that need it most”.
It would be reserved for incomes up to 1.2 minimum wage, i.e. a little over €1,560 net monthly, and for a period limited to one year only, “in order to avoid the risk of creating an inflationary spiral”.
The Circle of Economists also comes out in favor of “exceptional measures”as “a 25% tax on excess profits linked to the economic situation to contribute to measures to support purchasing power”like what has been done in the United Kingdom and Italy.
“Everyone must do their part to cushion the cost of rising prices,” he argues in his final statement, claiming in parallel a “significant reduction in production taxes” on businesses.
The government prepares the ground
Within the government, the idea of tightening aid a little more towards priority audiences also seems to be gaining ground. “We need to move from general mechanisms to more targeted mechanisms. The work is in progress,” explained the Prime Minister, Elisabeth Borne, Saturday, July 9, invited to Aix-en-Provence by the Circle of economists.
The Minister Delegate for Public Accounts, Gabriel Attal, explains for his part in an interview with ParisianSaturday, July 9, that “We went from what it costs to how much it costs. We must not refrain from spending, but we must ask ourselves the necessary questions before incurring major expenses”.
Purchasing power law: the government is struggling to break with “whatever it takes”
This little music is heard even though the government has just presented to the Council of Ministers, on July 6, its law in favor of purchasing power, which provides for 20 billion euros in additional aid. It will be discussed in the Assembly from July 18, with probably a shower of amendments from the opposition, the majority in the hemicycle.
opposition sling
For the government, the room for maneuver is narrow, between the need not to slip too much in the deterioration of the public accounts, while the clouds are gathering for the start of the school year on the economy, and the need to respond to the difficulties of households.
Marine Le Pen set the tone, Sunday July 10 on BFMTV. “Emmanuel Macron bought his election with ‘whatever the cost’ and today he says ‘now that I’m elected, we’re going to cut the taps'”, said the patroness of the National Rally deputies.
The government plans to reduce from October the rebate of 18 centimes per liter of fuel, which is granted to everyone. It would drop to 12 cents in October, 6 cents in November, before stopping on 1 December. It would be replaced by a fuel allowance for households with the lowest incomes.