Paris (AFP)

Tax cuts for households, but little effort on the deficit and companies involved: the draft budget 2020 presented Friday in the Council of Ministers raises concerns and criticism of employers and proponents of rigor.

The first salvo came Friday the chairman of the Finance Committee of the National Assembly Eric Woerth (LR). This bill of finance is "in 3 D: debt, deficit, spending," he told the press.

"The deficit is low, it's true, but it's the decline in the lowest deficit in 10-15 years," said Mr Woerth, denouncing a "near-zero financial effort" and a "spoiled growth" . "The public debt stagnates while in other countries it drops" and investments are far too low, he also accused.

The public deficit "remains significantly higher than the average of the euro area," said Didier Migaud, first president of the Court of Accounts and chairman of the High Council for Public Finance, auditioned by deputies on Friday.

"Despite some improvement the situation of our public finances remains fragile and would leave little room for fiscal maneuver in the event of an accentuation of the economic slowdown," he warned.

In its budget proposal for next year, the government has planned a drop of more than 9 billion euros in taxes for households, particularly through the reduction of income tax.

In the face of these expenses, the government posted some savings measures, with the continuation of the freeze on social benefits, the elimination of tax loopholes for businesses and even a smaller reduction in corporate taxes.

In total, with growth slowing to 1.3%, the deficit will be 2.2% of GDP, compared to 2% initially forecast by the government, and 3.1% expected this year (due to impact of the CICE transformation, tax credit for competitiveness and employment, in decreases in charges). Above all, the structural deficit (excluding exceptional items and economic developments) will remain stable, and the public debt will barely fall to 98.7% of GDP, after rising to 98.8% this year.

- Fear of stalling growth -

Presenting the draft budget Thursday night to the press, the Minister of Economy Bruno Le Maire defended these choices: the crisis of "yellow vests" and worries about the global economy "lead us to make decisions that promote investment and consumption, "he explained.

He also rejected attacks on a lax government on public finances: "We will still have in 2020 one of the lowest levels of public deficit in 20 years," he said Friday morning on France 2.

On the employers' side, there is concern about the efforts being made by businesses. The Medef fears that this budget will "stall the engine of growth", while the trade war between the United States and China and slowing growth in Europe "should have encouraged the government to a greater voluntarism by activating the right levers of growth ".

This budget means "a stop of the policy of the offer", led by the government for several years to favor the companies, still denounced the Medef, rejecting the argumentation of the government.

According to Bercy, corporate taxes will drop by 1 billion euros next year, thanks to the drop in corporate tax, and 13 billion euros over the entire five-year period.

The Confederation of Small and Medium Enterprises (CPME) regretted certain measures in the 2020 budget that will "increase the levies on companies", such as the reduction in July 2020 of the tax niche on off-road diesel, the reduction of 2 cents per liter of the fuel tax refund (TICPE) granted to road hauliers.

© 2019 AFP