This gap between revenue and expenditure would have been even greater without the cancellation of credits of several billion euros which made it possible to reduce French State expenditure by around 6 billion euros, to reach a total of 486.4 billion euros. The end-of-management finance bill (PLFG), a text which sets the budgetary adjustments to be made at the end of the year, provides for cancellations of credits amounting to 5.6 billion euros (including 4.5 billion the precautionary reserve frozen during the summer and 1.1 billion affecting different ministries). This amount is in addition to the 9.4 billion euros that had already been canceled by the previous government.
“60 billion” savings
At the same time, credits were opened for an amount of 4.2 billion euros to cover unforeseen expenses, in particular the cost of early legislative elections and support for New Caledonia. The PLFG should be examined from November 19 in the National Assembly, after the planned vote on the entire finance bill (PLF) for 2025, according to a timetable published by the government on the internet. It is presented while the draft budget for next year is the subject of fierce discussions in the National Assembly, where the government has suffered setbacks, sometimes coming from its own camp.
To straighten out the bright red public accounts which put France among the European bad performers, the executive plans “60 billion” euros in budgetary effort, in spending reductions and new taxes. Its objective is to start reducing the deficit, to 5% of GDP in 2025 then to 2.8% in 2029, below the maximum threshold of 3% authorized by the EU. According to the Minister of the Economy Antoine Armand, the second economy in the euro zone would be the last country to come within European budgetary standards, while it is also the third most indebted country behind Greece and Italy ( almost 115% of GDP expected in 2025).
The unexpected slippage in the public deficit is the second in as many years – it reached 5.5% of GDP in 2023 compared to 4.9% forecast -, enough to raise questions about the reliability of the forecasts of the previous Macronist majority. In the crosshairs, the former Minister of Economy and Finance Bruno Le Maire, at the helm of Bercy for seven years, is accused of budgetary insincerity, notably by the right.
Olympic bonuses
He has always defended it, attributing the situation to the massive support deployed during successive crises as well as disappointing tax revenues. He will have the opportunity to repeat it on Thursday during his hearing in the Senate as part of an information mission on the slippage of public finances. The former Minister of Public Accounts will follow in the afternoon, then the former Prime Ministers Gabriel Attal and Élisabeth Borne respectively on Friday and November 15.
In an opinion on the PLFG, the High Council of Public Finances (HCFP) on Wednesday called on the government to retain “prudent assumptions” in its financial texts, to avoid a new “major slippage” in public accounts. While Bercy plans to bring together a scientific committee to evaluate its economic models, its president Pierre Moscovici, who is also first president of the Court of Auditors, suggested on Wednesday entrusting the forecasts to “an independent institution” like the HCFP.
