For 2023, the French government plans a protective budget for purchasing power

The Minister of the Economy, Bruno Le Maire, told journalists that “France is within the euro”.

© AFP/Ludovic Marin

Text by: Altin Lazaj

3 mins

The French government presented its draft budget for 2023 on Monday, September 26 in a highly inflationary context marked by soaring energy prices.

The executive has chosen a protective budget in the face of the crisis, but also wants to contain public deficits.

This will therefore be the first big test for the camp of President Emmanuel Macron, now reduced to a relative majority in the National Assembly. 

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The energy shield will continue next year in order to preserve the purchasing power of the French.

Gas and electricity prices will only increase by 15% at the beginning of the year when these bills should have doubled.

The cost of this shield is estimated at 45 billion euros.

The state will also help businesses.

Different devices are provided depending on their size and profiles.

In total, 3 billion euros are planned in the to protect businesses from rising energy prices. 

In the context of the conflict in Ukraine, the draft law provides for an additional envelope of 3 billion euros for national defence.

Significant credits are also planned for the security forces, 1.4 billion euros, and the resources allocated to the Ministry of Justice will be up by 8%.

Another ministry which sees its budget increase considerably is National Education.

In 2023, he will benefit from a bonus of 3.7 billion euros, including a significant part to finance an “unprecedented” increase in teachers' salaries.

Support growth

The government will also continue on its path of lowering production costs for businesses in order to increase their competitiveness.

The executive has decided to abolish the business value added contribution in 2023 and 2024.

This is 8 billion euros that the production system will recover in this way.

Consequence: public expenditure, excluding the debt burden, should increase by more than 6% compared to the 2022 budget. Some 6 billion euros in commitments are recorded under "France 2030", the program intended to promote innovation, indicated the Minister of the Economy, Bruno Le Maire.

The budget for "ecology, sustainable development and mobility" will be 26.5 billion euros in 2023. It includes several key measures announced by the government, such as the Bike Plan, 250 million euros, or the Green fund of 1.5 billion euros for local authorities.

The “MaPrimeRénov” system for energy renovation is increased to 2.5 billion euros (+500 million).

1.3 billion euros will be devoted to the greening of the vehicle fleet.

Finally, France will end export guarantees for fossil fuels.

No project, from exploration to refining and transportation, will be guaranteed by the state.

Increase in the number of civil servants

The government also plans to create 10,764 additional civil servant positions for 2023, mainly in the Ministry of the Interior, Justice and National Education.

All of these expenditures will be made in a difficult economic context.

Growth in 2023 is forecast by the government at 1%, a very optimistic figure, while the Banque de France forecasts an increase in GDP of around 0.8%, which means that revenues will be lower. for the state budget than last year.

Added to this are major geopolitical and economic uncertainties in Europe linked to the conflict in Ukraine and its consequences.

The equation will therefore be difficult for the executive to keep its promise of a public deficit of 5% of GDP in 2023.

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