► Can France find itself without a budget?
And shutdown in France as in the United States where federal administrations stop on January 1 due to lack of agreement between Congress and the president on the budget? The situation is not impossible in France, even if the Constitution provides mechanisms so that the State has a budget on January 1 of each year.
Thus, in the event that Parliament has not decided within 70 days after the tabling of the finance bill (50 days for the Social Security budget), article 47.3 of the Constitution allows the government to implement its budget by ordinance.
Article 47.4 also provides for the possibility, in the event of a delay that is too short to allow the promulgation of the finance law, to pass an emergency law authorizing the collection of taxes, with state expenditure being fixed by decree on the basis of the previous year's budget.
The Constitution, however, says nothing about the case where the government would be censored after the use of article 49.3 to force its text through…
► What would happen if the government was censored?
This scenario could happen as early as next week, if the government chose to use 49.3 on the Social Security financing bill. He would then be exposed to a motion of censure which, if it brought together the votes of the New Popular Front and the National Rally, would be capable of bringing down the government.
“In this case, the parliamentary shuttle is supposed to continue with a new reading in each of the assemblies, explains Mathieu Carpentier, professor of public law at the University of Toulouse-Capitole. But I find it difficult to see a censored government, therefore resigning, carrying out a legislative process. »
In the summer, a note from the general secretary of the government aimed at clarifying the prerogatives of a resigning government, nevertheless considered that the budget fell within “dispatch of current affairs”.
“There is no more political act than a budget! It is not up to a government dealing with current affairs to defend a budget”believes Mathieu Carpentier for whom it would therefore be necessary to resort to emergency law provided for by article 47.4: “It is tangential to the letter of the Constitution, but it seems to me to be the most consistent with principle of continuity of national life erected by the Constitutional Council. »
The emergency law will still have to be passed by Parliament. “If it was rejected, it would be shutdow : on January 1, everyone will have the right to refuse to pay VAT or, if it is monthly, income tax because taxes will no longer have a legal basis…”warns the jurist for whom the government has another choice: give up using 49.3 and go to the end of the constitutional deadline of 70 days…
“From December 21, he will be able to pass the budget by ordinance”he explains. With, of course, the risk that the Assembly, angry at having been deprived of its voting prerogatives, would censure it. But France would indeed have a budget on January 1st.
► What economic and financial consequences?
However, such scenarios will not be without financial consequences for France. “Until now, we have benefited from a certain leniency from the rating agencies”notes Éric Dor, professor at the IESEG School of Management in Lille. In October, to maintain France's rating at AA, the Fitch agency was counting on the Barnier government's ability to pass the budget.
But, already, the markets are starting to worry: countries like Spain or Portugal, with the same rating but better economic fundamentals, are borrowing at more attractive rates than France.
The fall of the government would therefore lead the rating agencies to revise France's rating downwards. “Moving from the AA category to A will have consequences, warns Éric Dor. The big funds want to buy AA debt, less A debt. Banks which hold A debt also have the obligation to cover it with more equity: this could dissuade some from buying A debt. French debt. All of this will cause rates to rise. »
For Éric Dor, censorship by the Barnier government would therefore be “the disaster scenario”even if he does not fear “a Greek scenario” : “What awaits France is a rate difference with Germany of the level of Italy, around 1.5 points, compared to around 0.7 points today,” he explains. This could be expensive. »
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