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POLITICS – Not once has Michel Barnier uttered the word “ taxes » in his general policy declaration to the National Assembly this Tuesday, October 1. But faced with a situation « grave » on the budgetary level, the Prime Minister has outlined some avenues for his economic strategy. And tax.
“The situation is serious (…) because the burden of this debt is today the second largest item of state expenditure behind schools. It is unacceptable that we spend more on paying interest to others than on our defense or research,” declared Michel Barnier.
France’s public debt continued to swell at the end of June, reaching €3,228.4 billion – or 112% of gross domestic product (GDP). The forecast deficit is estimated at 6% in 2024, well beyond the 5.1% anticipated by the resigning Minister of the Economy Bruno Le Maire.
“Exceptional contribution” of the wealthiest and businesses
Pour “lighten the burden” of the debt, the effort will come from “two thirds” reducing expenses. “The first cure for debt is reducing spending. In 2025, two thirds of the recovery effort will therefore come from reducing spending. Reducing spending means giving up magic money, the illusion of everything being free, the temptation to subsidize everything”said the Prime Minister. The choice to reduce public spending is in line with the economic policy of Emmanuel Macron’s ministers since his arrival at the Élysée – outside of the pandemic period.
Nevertheless, Michel Barnier has confirmed an option in the works in recent days: that of a “exceptional contribution” of the French “the most fortunate”. A sort of compromise whose contours have yet to be defined, while a large part of the presidential camp’s deputies are opposed to any tax increase. A “participation in the collective recovery of large companies which make significant profits” will also be requested, all in the name of “the requirement for tax justice”. Michel Barnier also intends to fight against “tax fraud and social fraud”in particular by securing vital cards, he said.
The Prime Minister has set his debt reduction objectives: 5% in 2025 and 3% in 2029. Two levels which mark a clear break with the policy pursued by Bercy since 2017: last March, Bruno Le Maire reiterated his “determination total to return below 3% public deficit by 2027”.
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