the essential
Faced with the proliferation of social plans and business bankruptcies, the government is walking on eggshells. Refusing for the moment to question a Macronist supply-side policy which is reaching its limits, Michel Barnier will set up a “task force” to reassure unions and employers while the French fear an increase in unemployment.
Faced with the multiplication, feared by the government, of social plans in companies – the CGT has mapped some 200 in all sectors – Prime Minister Michel Barnier indicated, in an interview with Ouest France last Thursday, that his government was going to implement set up a “task force” between “all the ministers concerned (labour, industry, finance, budget, etc.) to provide rapid responses to each particular situation”. The government is also “asking all companies that have received public money in recent years, particularly to overcome the Covid and expensive energy crises, to tell us what they have done with it” , added Michel Barnier.
“We’ve been sounding the alarm for six months” says the CGT
If Matignon takes up the subject – even if it means putting into difficulty the Macronist component of the “common base” responsible for the controversial supply-side economic policy carried out since 2017 – it is because the situation is serious. Between the social plans which are accumulating in all sectors and in particular industry, automobiles and chemicals, and a historic rise in the number of bankruptcies, a red alert on employment has just been lit. alongside other burning issues for the government.
Michel Barbier must, in fact, face the anger of the agricultural world which is waking up this Monday with a national movement launched by the FNSEA and the JA, the discontent in the public service and in other sectors, and he must build a inextricable Budget 2025 which must achieve no less than 60 billion in savings to compensate for the abysmal slippage in public accounts – a deficit of 6.1% of GDP and 3,230 billion euros of debt…
Concern about employment is obviously affecting the unions. “We’ve been sounding the alarm for six months. In May, the CGT published a list of 130 current layoff plans. Nobody cared… We questioned all the politicians, etc. Dead silence. There, today, we are almost at 200,” estimated the general secretary of the CGT Sophie Binet, last Thursday during a “Facing the readers” in La Dépêche.
“That doesn’t surprise us at all. We said and explained why, in fact, this economic situation is the result, the sign of the collapse of Emmanuel Macron's supply-side policy. This supply-side policy costs a lot of money,” criticized Sophie Binet. According to Thierry Millon, research director for the Altares company, which lists all bankruptcy filings, “this year we are heading towards the figure of 67,000 (business) failures. This is a situation that our economy has never known,” he declared to L’Humanité, estimating that all of these bankruptcies would threaten 300,000 jobs, in particular because of “the domino effect on suppliers. »
Concern for ETIs and SMEs
On the side of businesses, plunged into uncertainty since the dissolution and who do not know what fiscal framework will emerge from the 2025 Budget, concern is acute, especially as the international economic context is becoming more tense with the return of a more isolationist than ever.
“While activity is already severely affected and short-term prospects are at half mast, the draft budget for 2025 and the debates which accompany its examination in Parliament promise a significant increase in the level of compulsory levies on ETIs (companies of intermediate size). If this were to be confirmed, potentially formidable consequences could be expected on the capacity of mid-sized companies to continue to create jobs, invest in innovation and transformation, which would compromise the ability of the country to continue to harvest the fruit of the competitiveness measures initiated in recent years, but also to straighten out its public finances”, estimates the recent 14e Palatine-METI barometer of mid-cap financing.
As for SMEs, 46% of managers plan to invest this year, a proportion down 4 points over the quarter and 11 points over one year, according to the latest Bpifrance Le Lab – Rexecode Barometer.
The return of social VAT
The situation brought Medef President Patrick Martin to the forefront yesterday. In an interview with Le Parisien, the man who assured at the end of September that companies – which receive some 200 billion euros in unconditional public aid – were ready to pay more taxes, now insists that “we must choose between increases in 'taxes and job creation'. “We do not want a single euro increase in the cost of labor” insists the representative of large companies who criticizes the indexation of pensions to inflation and proposes the establishment of a “social VAT”, an old idea of the increase in VAT which, according to him, would bring in 10 billion euros if it were increased by one point.
The government, which is not currently considering a social VAT, said yesterday through the Minister of the Budget, Laurent Saint-Martin, “ready for only half, 2 billion euros, can be requested from businesses” instead of the 4 billion reduction in reductions in employer contributions initially presented in the budget.
But the government remains caught between the need to best support employees who are victims of social plans, the obligation to find funds to make up the deficits and the desire not to penalize the competitiveness of companies. A puzzle that will quickly have to be resolved to avoid an increase in unemployment that 84% of French people fear.
