The government has identified more than 40 billion in savings for the 2025 budget. The indexation of pensions to inflation, which was to take place on January 1, is postponed to July 1.
One week before its official presentation, the contours of the 2025 finance bill are beginning to be refined. During his general policy speech, Michel Barnier indicated that the government was targeting a gross domestic product (GDP) deficit of 5% in 2025. The deficit being expected at 6.1% in 2024, it is a regime of 60 billion euros that the public sphere will have to pay next year. Michel Barnier revealed his recipe on Tuesday to launch the cleaning up of the accounts: the finance bill will orchestrate a little more than 40 billion in savings, and a little less than 20 billion in new taxes. The State will bear a little more than half of the savings effort; the social sphere and local communities distribute the rest.
One of the most emblematic savings avenues of the future budget will be the postponement until July 1 of the indexation of pensions to inflation. Pensions will therefore be frozen for six months. A measure which, according to our information, would allow the recovery of around 3 billion euros. Theoretically, every first of January, as the Social Security Code specifies, the old age pensions provided by the general system and the plans aligned with it are revalued “on the basis of a coefficient equal to the change in the annual average of consumer prices, excluding tobacco, calculated on the last twelve monthly indices of these prices published by INSEE.
Many economists recommended, in the constrained budgetary context, a one-year pension freeze, on the grounds that the standard of living of retirees is today higher than that of workers. Emmanuel Macron contradicted them during his press conference last June, assuring that pensions would be “ well indexed to inflation “. The LR also made any reduction in pensions a red line. By opting for a simple delay of six months, the Barnier government is playing on an in-between which should, it hopes, avoid blockages in the Assembly and too heated protests.
Control health expenses
Still on the social side, the government intends to control the flow of health spending. In the social security bill, a “national health insurance spending objective”, the famous Ondam, of 2.8% will be included. Given inflation expected to be slightly below 2%, such a target represents a significant effort. The Ondam had been set at 3.2% for 2024.
In the sphere of the State, around 20 billion euros in savings are finally expected. The 15 billion already included in the ceiling letters prepared by the previous government, to which the new team intends to add, by amendment due to the restricted timetable, an additional 5 billion in savings. Among the missions which are about to undergo the biggest reduction are public development aid and sport, which is coming out of a particularly sumptuous year with the Olympic Games. Measures to slow down the spending of various state operators are still in the pipeline, notably through the merger of some of them (Business France and Atout France, France Stratégie and the Planning Commission, etc.). They should lead to a little more than a billion euros in savings.
Finally, communities will also have to make their contribution. Their effort should represent around 7 billion euros. In a report published today, the Court of Auditors proposes measures to reduce spending for communities, representing a total amount of 8.8 billion euros in savings per year. The majority of these spending reductions would be at the hands of communities. The Court advises them in particular to “control the evolution of the workforce” so as to bring them back to their level of the early 2010s, which could represent “a saving in spending of 4.1 billion euros per year from 2030”.
