With the “special law” and the decree on “voted services” exceptionally extending the 2024 budget, France entered an unprecedented period on January 1. “We cannot make new commitments: France operates on minimum service”summarized the Minister of Social Affairs Catherine Vautrin, on January 3 on RTL.
A circular of December 30 from the new ministers of the economy, Éric Lombard, and of public accounts, Amélie de Montchalin, warned of the consequences of management limited to the minimum essential to ensure the execution of public services: no creation public employment is thus not possible.
At the Ministry of Justice, we will have to wait for the vote on the 2025 finance bill (PLF) to confirm the 343 magistrates and 320 additional clerks, which the former Minister of Justice Didier Migaud had managed to extract. But all the decisions have to be made again. That “will be the subject of joint work with Bercy in January”soberly summarizes the chancellery.
Only 25% of the available budget
In each ministry, discussions are held with the ministerial budgetary and accounting controller, placed directly under the authority of the budget directorate and the general directorate of public finances at the ministry of finance. This year, the Lombard-Monchalin circular instructed him to block any expenditure above 25% of the previous year's budget.
“Each year, I commit in advance about half of my budget from December, explains a department head in a large government administration. Half of these orders will have to wait to be paid for by our suppliers, with the risk of financial penalties for the State. »
However, the circular provides that certain expenses can be maintained if their postponement results in “a disproportionate cost for the State”. But this provision rather concerns strategic expenditure, such as in terms of armaments.
“In accordance with the military programming lawthe PLF 2025 planned to increase defense spending by 3.3 billion euros. Not having this budget at the start of the year poses the risk of a delay or even cancellation of orders”worries former MP François Cornut-Gentille, who advised Michel Barnier on defense issues.
“Everything that is not acquired is fragile”
The most obvious example is that of the new generation aircraft carrier (Pang), the firm order for which should theoretically be signed in the first half of 2025. “Meeting deadlines appears all the more crucial as Chantiers de l’Atlantique have “reserved” their industrial capacities for the construction of the Pang for a given period by renouncing the construction of civil buildings in this niche”warned senators Hugues Saury and Hélène Conway-Mouret at the end of November in their report on the defense budget.
Foresighted, the general staff had already ordered the Pang nuclear boilers in March, for 600 million euros. A withdrawal would therefore be particularly costly for the State. “Beyond that, everything that is not acquired is fragile, especially when needs are pressing elsewhere and it will be necessary to arbitrate”relief François Cornut-Gentille.
Thus, in social matters, expenditure goes by all the more quickly as so-called “window” expenditure is not affected by the limitation of expenditure. In the absence of a Social Security financing bill (PLFSS) in 2025, we must also count on the automatic increase of 2.2% in retirement pensions (+ 6.5 billion euros, when the Barnier government hoped to save 3.6 billion by postponing the increase in pensions until July 1), and on health expenses that health insurance can no longer contain. According to Amélie de Montchalin, without savings measures, the Social Security deficit could amount to 25 billion at the end of 2025 (and no longer 16 billion in the Barnier government's PLFSS).
“We know very well that we will have to contribute to reducing deficits”
In local authorities, the situation is not necessarily easier, even if the special law has secured the main state allocations. “The overall operating allocation will be paid normally, reassures Jérôme Lenoir, general director of services for the agglomeration and the city of Sète, and vice-president of the Association of Territorial Administrators of France. The same goes for local taxes for which we will benefit from the automatic indexation of rental values to inflation. »
Another reason for relief: communities are exempt from the deductions provided for by the PLF, with the notable exception of the 3% increase in contributions to the National Retirement Fund for Local Authority Agents (CNRACL). “But we know very well that we will have to contribute to reducing the deficits and, as in October, we are at the mercy of announcements made at the last moment”recognizes Jérôme Lenoir who had the budget of the city of Sète voted in December and will wait until April for that of the agglomeration.
Recessive risk
But grants are not the only revenue of communities. “The share of VAT that we receive represents two thirds of our revenue”, explains Isabelle Mouze-Esteves, deputy general director of services in the Calvados department, worrying about the risks to her finances from sluggish growth.
“Less consumption means less VAT. Less investment by businesses and households means less construction and real estate purchases, therefore fewer development taxes and fewer transfer taxes”she summarizes. That is, in total, several tens of millions of euros less, while departmental spending (RSA, dependency, childhood, etc.) is constrained. “We are trying to generate operating margins, but the increase in CNRACL alone represents more than 2 million per year over three years: the equivalent of 150 positions”she points out.
The risk is therefore that communities will not touch investment, even though it plays a significant role in growth. According to INSEE, government spending contributed more than half of the 1.1% of French growth in 2024. “Communities represent 60% of public investment, but only 20% of public spending and 9% of the debt”insists Jérôme Lenoir who has maintained the investment in Sète at 35 million, “which we finance entirely ourselves”.
With the extreme limitation of public spending, the risk of a recessionary effect is real. “Associations or businesses, our local partners are worried. Because behind public procurement, there are jobs, warns Isabelle Mouze-Esteves. We are in a cycle where there is fear of a recession. » A fear shared by Éric Lombard who agreed that containing the deficit within a range “between 5% and 5.5%” was a necessary flexibility “to preserve growth”.
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A deficit “between 5% and 5.5%”
After a deficit of 6.1% of GDP in 2024, and while the Barnier government hoped to reduce it to 5% in 2025, the new Minister of Finance Éric Lombard estimates the deficit “between 5% and 5.5%”.
However, this figure remains in compliance with European rules. of the stability pact which asks countries under excessive deficit procedure, such as France, to reduce their deficit by at least 0.5 points each year.
French growth should be revised downwards: + 0.8%, less than the 1.1% on which Michel Barnier was counting in his finance bill, but closer to the latest forecast from the Bank of France (+ 0.9%).
This will represent a budgetary effort “around 50 billion euros”less than the 60 billion ambitioned by the previous government.
