Yesterday, Wednesday, December 4, the deputies censored the government of Michel Barnier, which had the effect ofpostpone the examination of budgetary texts. A new government must be quickly appointed and a new 2025 finance bill adopted before the deadline of December 31, 2024 to avoid a total paralysis of the country. The abandonment of the measures initially planned will have consequences for the field of health insurance and credit.
Health insurance: transfer of frozen charges
The Barnier government took responsibility by drawing out article 49-3 to have the 2025 Social Security financing bill (PLFSS 2025) adopted. This caused the motion of censure tabled by the New Popular Front and voted on Wednesday December 4 by a majority of 311 deputies.
Prime Minister Michel Barnier must present his resignation to the President of the Republic, which implies the rejection by Parliament of the PLFSS 2025. This text included in particular the cost-saving measures envisaged to reduce the Social Security deficit. Mutual insurance companies and other complementary health organizations were called upon to contribute, since they had to absorb 20% of these savings, or an amount of around 1 billion euros.
Ces charge transfers concerned in particular:
Pending a new government, these transfers of costs from compulsory health insurance to supplementary health organizations are frozen. 2 scenarios are emerging:
- Reinstatement of load transfers in the new PLFSS 2025
- Application of the provisions by ordinance without adoption of budgetary texts before December 31, 2024.
Late payment of benefits
The situation is unprecedented, because neither the Constitution nor the organic law provides for the procedure in the event of rejection of the Social Security budget. Gold, social protection needs a budget to function and resort to borrowing to cover its cash flow needs.
The absence of a budget could lead to next March delays or suspensions of payment of benefits (retirement pensions, daily allowances, reimbursements to policyholders), a hospital financing problem and payment of salaries of health personnel.
No impact on mutual health prices
Supplementary health organizations have already integrated future load transfers into their pricing policy. Contributions increase between 5% and 10% in 2025 depending on the providers and their policyholder portfolio.
However, the uncertainty which now weighs on public health policy is damaging to mutual societies and other complementary organizations: this lack of visibility will force them to adapt in the more or less short term to measures which could further increase their contribution to covering health expenditure. At the end of the chain, it is the policyholders who pay the bill.
Fall of the Barnier government: danger for real estate credit in 2025
Risk of rising rates
The political instability following the overthrow of the Barnier government has already impact on monetary conditions. French government borrowing over 10 years has increased, and the gap between French and German borrowing rates, which indicates investor confidence, is widening.
France currently borrows on the financial markets at a level almost equivalent to Greecewhich, we remember, was bankrupt in 2012, which required a massive aid plan from the EU and unprecedented budgetary rigor.
The increase in bond yields is reflected in borrowing rates for individuals and businesses. While the real estate loan rate have been falling very regularly since January 2024, we can fear stagnation or even an increase in the coming weeks.
Uncertainty over PTZ 2025
Another element which is paying the price for the current situation, the PTZ could remain in the 2024 version. In order to revive the real estate market in crisis for 2 years, the 2025 finance bill (PLF 2025) provided for a extension of PTZ in new and old buildings throughout France, also to individual homes ousted since 2021.
This is bad news for first-time buyers who could, thanks to this universal version, finance the purchase of their main residence more easily.
The PLF 2025 provided for other measures relating to real estate:
Pending a clear budgetary policy, it is a safe bet that many households will postpone their real estate project.
