Barthélémy Philippe / Photo credits: MAEVA DESTOMBES / HANS LUCAS / HANS LUCAS VIA AFP 7:29 a.m., March 5, 2024

The French government has significantly revised downwards its growth estimate for 2024, from 1.4% to 1%, revealing “immediate” savings of 10 billion euros on state spending.

A first step since the next target is even more important: at least 12 billion euros in savings.

The government is looking for savings in all directions.

After the downward revision of the growth forecast for 2024, the executive has already recorded 10 billion euros in savings but this is only a first step.

The next target is even bigger: at least 12 billion euros in savings.

And since the executive refuses to increase taxes, it is eyeing our copious social model.

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A social model that is expensive

This social model is very expensive for the State: 850 billion euros per year, a record in the European Union.

Financing social protection represents 56% of state expenditure, a third of GDP and the largest items among these expenditures are pensions and health, explains Bruno Chrétien, president of the Social Protection Institute.

“Retirement is approximately 340 billion euros, 13 to 14% of gross domestic product (GDP). Health will come in second place with 10 to 11 points of GDP. Then, we will have expenses which are of lesser importance: family policy, welfare (work stoppage, death coverage). Third position, everything related to unemployment and then we sometimes include housing assistance."

Not revaluing pensions?

The most effective savings lever would be not to increase pensions in line with inflation as is the case every year.

Under-indexing by a small point compared to inflation would save three billion euros in one go.

But the maneuver is risky because those over 65 vote more than other age groups, and often for Emmanuel Macron.