Budget of "recovery and investment", priority to the sovereign ... With its budget bill for 2022, while starting to reduce the public deficit, the government is counting on strong growth to finance an increase in spending. 

20 Minutes

takes stock of the measures to be taken. 

A strong economic recovery

The draft budget is based on a growth forecast of 6% for 2021 and 4% for 2022, one of the strongest economic recoveries in the euro zone, after one of the most massive recessions in Europe (-8% in 2020) .

"The economic situation is better than expected", welcomed the Minister of the Economy Bruno Le Maire on Wednesday, who prefers to remain cautious and not raise the growth forecast because "we are never immune to either a health accident is unforeseen ”.

Deficit reduction

The recovery will allow the public deficit to be absorbed a little more than expected.

According to Bercy forecasts, it should drop from 9.2% of GDP in 2020, to 8.4% this year, then 4.8% in 2022 (against 5.3% expected previously).

Consequence: the ratio of public debt to gross domestic product (GDP) should also decline slightly, to 116% in 2021, then 114% in 2022.

Sovereign missions in the spotlight

Expenditures currently provided for in the state budget should increase sharply next year, from 11.8 billion euros, to 302.1 billion.

It will even be a little more, due to additional expenditure not yet taken into account in the investment plan and measures for youth employment.

The sovereign ministries are doing well in the budget negotiation game, with +1.7 billion euros for the Armies, +1.4 billion for the Interior and +700 million for Justice.

Education is also well endowed (+1.7 billion after +4.3 billion in 2021), in particular to finance increases in teachers' salaries, as is Research (+760 million euros).

Tax cuts

The government is maintaining the schedule of tax cuts decided before the crisis, but does not want to take any new tax measures. The wealthiest 20% of households will see their housing tax reduced next year, after a first step in 2021. Already completely abolished for 80% of households, it will be for all taxpayers in 2023. Likewise, l he corporation tax will rise to 25% for all companies, the latest step in a reform initiated in 2018, with the aim of improving their competitiveness.

Over the five-year term, companies will have paid 25 billion less taxes and households will have saved as much, according to the government.

The compulsory tax rate is expected to fall next year to 43.5% of gross domestic product (GDP), the lowest since 2011, while it was 45.1% in 2017.

Emergency measures

The “emergency plan” mission created at the start of the crisis to finance support for businesses and households has been extended, but will only be allocated 200 million euros for the purchase of masks.

In total, 80 billion euros from 2020 to 2022 were mobilized in these emergency measures (solidarity fund, partial unemployment, etc.).

The government has also provisioned 2.7 billion euros for possible defaults on loans guaranteed by the State, out of 140 billion euros of credits allocated by the banks.

Amortization of Covid debt

How to repay the “Covid debt”?

After two years of digging linked to the opening of the budgetary sluices in the face of the virus, the government undertakes to amortize the State debt linked to the crisis, estimated at 165 billion euros, over twenty years, until 2042.

It will enter into a contract with the Public Debt Fund providing for each year to allocate approximately 6% of the surplus revenue generated in comparison with the year 2020. In 2022 the government will devote 1.9 billion euros to this.

“The debt will be reimbursed by the fruits of growth,” Bercy explains, excluding tax increases.

The social debt, of 65 billion, has already been the subject of a vote in Parliament on its amortization.

"Stability" in the number of officials

For 2022, the government plans 509 civil servants less, bringing to 1,249 the decrease for the entire five-year term, very far from the reduction in the workforce of 50,000 State employees, out of 120,000 public officials in total, recommended by Emmanuel Macron in his electoral program in 2017. "We had to meet a certain number of needs and face crises", justified the Minister of Public Accounts Olivier Dussopt.

"On the scale of the five-year term, our objective is therefore the stability of State jobs".

Two strangers

Unprecedented fact, the executive has not yet arbitrated two expected flagship measures: the investment plan and the commitment income.

The first, which should be in the order of 30 billion euros, aims to invest in future and innovative sectors, such as hydrogen, biotechnology, electric batteries or semiconductors.

Emmanuel Macron was originally supposed to unveil it in early September, but its presentation was postponed to mid-October.

The second measure is the commitment income for young people, the last major social reform of the five-year term.

It aims to support those who have no job or training, and who in exchange for a commitment will receive an income, probably around 500 euros.

Estimated cost: 2 billion euros per year, according to the Ministry of Labor.

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  • Covid 19

  • Coronavirus

  • Bruno the Mayor

  • Bercy

  • Economy Minister

  • Budget

  • Finance

  • Economy

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