The government makes 10 billion euros in budget cuts

Europe 1 with AFP // Photo credit: MAEVA DESTOMBES / HANS LUCAS / HANS LUCAS VIA AFP 12:46 p.m., February 22, 2024

The French government announced Thursday by decree ten billion euros of savings in the 2024 budget voted before Christmas, drawing heavily on the "sustainable ecology, development and mobility" programs.

A less green budget, but no tax increases: the French government announced on Thursday by decree ten billion euros in savings in the 2024 budget voted before Christmas, drawing heavily on the "ecology, sustainable development and mobility" programs. .

Justified by less vigorous growth expected in 2024, the decree published in the Official Journal "cancels" a total of ten billion euros of budgeted expenditure in 29 areas, ranging from ecology to higher education, including justice, defense, territorial cohesion and public development assistance.

In the "ecology, sustainable development and mobility" programs, the one entitled "energy, climate and post-mining" is cut by one billion euros, while the "fund for accelerating the ecological transition in the territories" loses more than 400 million.

Furthermore, the categories “work and employment” and “research and higher education” are affected respectively by 1.1 billion and 900 million euros in canceled credits.

Public development aid is cut by 740 million euros, assistance with access to housing loses 300 million euros, the national police 134 million euros and the prison administration some 118 million.

The government announced these "immediate" savings on Sunday to respect its budgetary commitment, amid fears of a downgrade in its financial rating, with the main rating agencies having to make a decision in the spring.

“Short sight”

Raised in September to the rank of “absolute priority”, the budget allocated to the ecological transition is reduced, with a downward revision of 1 billion euros in the aid envelope to better heat and better insulate MaPrimeRénov housing.

Discussed for several months, the implementation of a flat-rate contribution for employees to the personal training account (CPF) has now been decided.

According to the Minister of the Economy Bruno Le Maire, it is a question of showing "responsibility", while the government categorically excludes any tax increase to restore public finances in bad shape.

Objective: to hold the public deficit to 4.4% of gross domestic product (GDP) in 2024, faced with a growth forecast lowered to 1%, compared to 1.4% previously, in a context of geopolitical tensions and economic slowdown, notably in China and Germany.

Activity is also caught up this year by the increase in interest rates decided by the European Central Bank (ECB) to counter inflation but which weighs on investments and demand.

These clear cuts sparked indignant reactions in the ranks of the left, in the opposition.

Citing ecology, employment or housing, the president of the Finance Commission of the National Assembly Eric Coquerel (LFI) deplored on for the executive are the most impacted".

“This short-sighted policy, the priority of which remains to preserve the enrichment of capital to the detriment of ecology and society, is a catastrophe,” he said.

Also on X, CGT general secretary Sophie Binet estimated that “the government is sacrificing the future with these drastic cuts in public spending”.

She proposed instead to “tackle the 200 billion in aid to businesses”.

"Do more"

This tightening of the screw is in addition to the 16 billion savings already voted in the 2024 budget, mainly coming from the removal of the energy shield, i.e. 26 billion savings compared to 2023. A sign of budgetary difficulties, a source at the French Ministry of the Economy reported on Monday that it would "probably be difficult to meet" the target of a deficit of 4.9% of GDP for 2023. The balance will be all the more difficult to find as the At the same time, the executive announced new spending to support farmers, hospitals and Ukraine.

The austerity cure is therefore intended to continue.

The government has not ruled out an amending finance bill in the summer, and has already warned of the need to find at least 12 billion euros in additional savings in 2025. "It is very likely that we have to do more,” warned Minister for Public Accounts Thomas Cazenave on Monday.