the special law passed yesterday in the Senate

Unsurprisingly, the Senate unanimously voted on Wednesday December 19 for the “special law” allowing the State to carry out current affairs from January 1, in the absence of a Finance law. The text provides in four articles the minimum legal framework to authorize the State to raise tax – according to the same tax rules as 2024, to honor its European commitments, to allow the Treasury as well as the social security funds to continue to issue debt for the proper functioning of public services.

A decree to come for the expenditure component

The “special law” will be supplemented by a decree to be published in the Official Journal by December 31, setting spending ceilings for each of the State’s lines, according to maximum amounts which cannot exceed those allocated this year.

Thus, new fiscal measures, which would not be necessary to ensure the continuity of national life, do not fall within the domain of the special law. Pending a finance bill, the additional credits granted in particular to the Armed Forces budget, which was to benefit from the largest increase in 2025, cannot be released. Likewise, a whole series of tax measures favorable to farmers cannot come into force.

Retirement pensions revalued but no change for the IR scale

On the household side, if the indexation of the progressive scale of income tax to inflation is not ensured by the text, the latter will on the other hand imply the application of the revaluation of basic retirement pensions ( +2.2%) from January 1, 2025 – a measure that the deposed government of Michel Barnier had wanted to reduce and postpone for six months.

On its own, the special law will not, however, make it possible to modify the current trajectory of public finances. In accordance with projections for the 2024 school year, as it stands, the budget should cause the public deficit to slip by some 35 billion additional euros to bring it to 6.2% of GDP. The vote on a new finance law remains absolutely necessary, warned the general budget rapporteur in the Senate, Jean-François Husson.

We need to understand the seriousness of the current situation [qui] weakens our economy and the place that France must occupy at the European level, he emphasized last week during the hearing of resigning ministers Antoine Armand (economy) and Laurent Saint-Martin (Budget).