The shaking was predictable. The opposition had brandished the threat well before the date of the final vote on the Social Security budget. But if the negotiations have been strong over the last few hours, this has not been enough for the Barnier Government to tip the scales.
Consequence? The Prime Minister announced the adoption of the Social Security budget, without a vote by parliamentarians and via article 49.3 of the Constitution, this Monday, December 2. Two motions of censure were therefore tabled: one on the NFP side, the other on the RN-UDR side.
If they were to be adopted, they would signify the resignation of the Barnier Government, but not only that. The 2025 budget would simply be erased from the shelves. A reset of the counters which therefore creates winners and losers from this fall of the executive.
The winners
For some French people, this resignation would be a sign of clarity. To restore public finances, Michel Barnier's government proposed in particular: an imposition of wealthiest households at a minimum of 20% for three years (2 billion euros hoped for) and a “exceptional contribution” on the profits of large companies (8 billion). The budget passed to the ace would therefore see this imposition canceled.
On energy, the French would see the price of electricity drop a little more than planned in the budget. The government's plan included an increase in taxes on electricity. The Senate opposed it and then put forward the idea of increasing the tax on natural gas for fuel use. During a deliberation, the senatorial majority agreed to delete it.
Regarding pensionsunder the Social Security Code, these are revalued each year at the beginning of January, indexed to the inflation recorded by INSEE (National Institute of Statistics) for the previous year. To save 3 billion euros, the draft social security finance laws planned to under-index them in 2025, up to half of inflation, except for pensions below the minimum wage which were to receive a supplement in July. Without this text, the law prevails and the increase in pensions will automatically be based on inflation.
In the area of health, the Senate had approved, with the support of the government, a reduction of 200 million euros in the budget allocated to state medical aid (AME) intended for undocumented immigrants. A decision which aroused the indignation of many specialists in the sector, who highlighted a public health problem, in the face of this reduction in the budget. This reduction may therefore not take place.
With the budget down the drain, big companies are among the winners. Indeed, several measures concerning them were to appear in the State budget in the “revenue” section, such as a surtax on the profits of large companies, an exceptional tax on large maritime freight companies, or even a tax on GAFAM , large digital companies… Finally, the senators also extended the innovation tax credit for a period of three years, however reducing its rate from 30% to 20% from 2025.
Apprentices can also take a breather. It was planned in the 2025 budget that they would be subject to two social contributions (CSG and CRDS). But this will not be the case.
As recalled The Point in an article dated this Tuesday, December 3, the budget included an “exceptional contribution to operating income” targeting large shipping companies, generating more than a billion euros in turnover. However, this measure in practice concerned a single entity: CMA CGM, the main French shipowner, owned by the Saadé family. This contribution was to amount to 500 million euros for 2025, then to 300 million euros in 2026directly impacting the Marseille-based company.
Always according to The Point, the elimination of the budget also leads the abandonment of the solidarity tax on plane ticketswhich was to come into force on January 1, 2025 and generate 150 million euros, as well as tax on passenger air transportestimated at 850 million euros. These measures had aroused strong opposition in the aviation sector.
THE losers
Among the losers, These are the assets that will be most targeted by the end of the Barnier government. Usually, the income tax scale is indexed to inflation or to changes in household income observed the previous year. This indexation aims to prevent the increase in income from leading to a greater increase in taxation. A measure that the government planned to renew this year.
However, without this measure, hundreds of thousands of households will fall within the scope of taxation. According to the OFCE which published a study on the impact of freezing the income tax scale, these are “nearly 380,000 households would become liable for income tax although they would be exempt if the scale was indexed to inflation.” Still according to this study, “in the event of a freeze, households close to the median standard of living would lose between 50 and 100 euros per year compared to an indexation situation, i.e. between 0.2% and 0.3% of their annual standard of living.”
Although larger groups would benefit a freeze on certain tax measuresthe political instability induced by the fall of the government could deter investments. CAC 40 companies, particularly exposed internationally, could suffer losses on the stock market, as evidenced by recent fluctuations due to budget uncertainty.
Government censorship would result in a temporary blockage in budgetary managementwhich would worsen tensions on the markets. French borrowing rates have already reached levels close to those of Greecereflecting growing investor distrust. A lasting drop in confidence could cost the state billionsmaking deficit reduction efforts even more complex.
The finance bill (PLF) included several measures aimed at reducing taxation for farmers, as well as a modified system to facilitate the transfer of agricultural holdings, recalls France Info. Among the decisions ratified was the abandonment of the increase in taxation on agricultural diesela subject which had aroused strong discontent and triggered several demonstrations in the sector. Moreover, the Social Security financing bill (PLFSS) provided for a reform of the calculation of agricultural pensionsnow based on the 25 best years of income to improve operators’ pensions.
Bye bye, the return of the zero-rate loan… The Upper House had validated the reinstatement of the zero-interest loan (PTZ), a system intended to help first-time buyers whose income respected a ceiling to finance their first real estate purchase, extended to the entire territory. The 2025 budget aimed to revive the housing marketthanks to several key measures. Among these, the senators had approved an exemption from certain inheritance taxes, applicable when the donation was intended to finance the acquisition, construction or renovation of housing.
To be approved, the motion of censure discussed this Wednesday, December 4, must receive 288 votes.
