A few hours before the vote on the motion of censure which could bring down the Barnier government, a question comes up on all television sets: is France playing big on the economic level? Because if the finance bill for 2025 has not yet been buried, there is very little chance that its examination will be successful in the event of the fall of the executive. Weakened growth, slowed budgetary consolidation, increased uncertainty… The government's probable censorship will penalize France, economists predict, without necessarily plunging it into “the storm” feared by the executive. Special law or ordinance, France has several means of avoiding paralysis which would prevent civil servants from being paid, for example. This would result in the renewal of the 2024 budget. It remains to be seen who has the most to lose.
At the dawn of the motion of censure, the threat of a greater burden of income tax was brandished by the government. “Nearly 18 million French people will see their income tax increase, others will pay it for the first time because we have not been able to include in the finance law the reindexation which is planned […] for the scale of tax brackets, it is inevitable”, affirmed, solemnly, Prime Minister Michel Barnier, invited by France 2 and TF1 Tuesday evening. In the event of the fall of the government, the tax scale on income would therefore not be indexed to inflation, which would force 380,000 new households to make a tax gesture for the first time.
If this scenario is enough to scold some French people, it is far from being the most likely, reassures the director of economic studies at the IESEG School of Management Eric Dor, contacted Tuesday evening by AFP. A budget for 2025 voted on subsequently, during the year 2025, “will necessarily contain this clause since it is customary to include it”, he underlines.
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In addition to the middle class, local authorities, whose allocations paid by the State risk being frozen, could be among the losers, underlines to AFP Maxime Darmet, economist at Allianz, who sees this as a risk for the operation of public services. Some could compensate for the shortfall by raising local taxes, particularly property tax, according to him. Enough to further penalize taxpayers.
A setback for farmers
While they had been expressing their anger throughout France for several days, farmers would see certain victories, validated by the finance law, go up in smoke, in the event of a motion of censure being adopted. “For almost a year, […] we achieved a certain number of things. But the dissolution and the threat that weighs on the government today lead us to believe that a certain number of the advances that have been announced will not necessarily be achieved. This is the case, for example, of cash loans on which the Minister [de l’Agriculture, Annie Genevard] made announcements three weeks ago”, lamented Arnaud Rousseau, president of the FNSEA, Friday November 29.
Farmers had notably managed to secure reform of the calculation of their retirement pension or tax and social benefits. The agricultural world will nevertheless be able to console themselves with the higher budget of their ministry. “The 2025 PLF provides for an allocation to Agriculture of 6.79 billion euros in commitment authorizations and 6.60 billion in payment credits, compared to 7.6 and 7 billion euros in the 2024 PLF” , underline our colleagues from Public Senate.
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Another sector to be hit hard by this political instability: the army. “The vote to censure the government, and therefore the absence of a budget for the year 2025, would break this essential momentum for the protection of our fellow citizens, by preventing the proposed increase of 3.3 billion euros for our defense budget”, wrote on the social network X Sebastien Lecornu, mentioned to replace Michel Barnier at Matignon. The minister warns that this political choice would have “very concrete” consequences on more than “200,000 jobs in more than 4,000 companies throughout our territories”.
Same disappointment among the Minister responsible for disabled people Charlotte Parmentier-Lecocq who said, Tuesday December 3, “worried” about the impact on disabled people of censorship by the Barnier government, listing the “long-awaited” measures. which would be “on stand-by”, such as full reimbursement for wheelchairs. “It’s 270 million euros, that is to say an extremely large budget, that we had planned to deploy”, for “the 50,000 solutions”, which should make it possible to “better support” people in need. disability situation”, she continued. Note that if last year's budget was renewed, it would ignore the 2,000 additional AESH, that is to say the people who accompany the children in situations of disability at school or on the full reimbursement of wheelchairs, the terms of which were to be defined “before the end of the year”.
Retirees win the day
If there are losers, there are also winners. Starting with the 17 million retirees who will finally see their pension increased on January 1, 2025, while the government only planned to do so entirely for pensions below the minimum wage, with a bonus delay. It was also the last “red line” of the head of the National Rally, Marine Le Pen. The Social Security budget provides for an increase of 0.8% for all retirees on January 1, 2025, i.e. only half of inflation, before a second wave of increase of 0.8% on July 1 for retirees under the minimum wage. Questioned on franceinfo on Wednesday, Labor Minister Astrid Panosyan-Bouvet confirmed: “retirees would indeed be winners.” Cost for the State: around 3 billion euros.
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Furthermore, the State should renounce the tax increases – at least 20 billion – that it was considering, such as the surtax on very high incomes or the profits of large companies. Consequently, they would escape the “exceptional contribution” which should have allowed the government to recover 8.8 billion euros in 2025 and 4 billion in 2026 with this tax. In total, 450 companies with a turnover of more than one billion euros were affected. Note, however, that large groups could suffer from the country's financial instability, although they are less exposed than small and medium-sized businesses.
And among the companies rubbing their hands are the airlines. These could see the solidarity tax on plane tickets, which was to apply from January 1 and bring in 150 million euros, disappear. This tax had received the green light from the Senate, although the amount was revised downwards: it was thus to go from 2.63 to 5.30 euros for an economy class ticket to France or Europe, instead of the 9.50 euros envisaged by the executive. Sigh of relief also among maritime carriers: the budget, which should be swept away, includes an “exceptional contribution” – which planned to amount to 500 million euros in 2025 and 300 million in 2026 – specifically targeting the French giant maritime freight, CMA-CGM, owned by Rodolphe Saadé. No doubt soon ancient history.
