The Government of France sets savings of 50,000 million in the 2025 Budget

The Government of France, headed by the recently appointed Prime Minister, François Bayrou, begins to try to attract parliamentary groups to carry out the 2025 Budget. In an interview yesterday for the public radio station France Inter, the French Minister of Economy , Eric Lombard, confirmed that the savings objective with which they are working in the public accounts for 2025 is 50,000 million euros. A more modest ambition than the 60 billion raised by his predecessor, Michel Barnier.

Likewise, both Lombard and the Minister of Public Accounts, Amélie de Montchalin, confirmed to the media this Monday that the objective of this saving is to reduce the public deficit from 6.1% of GDP in 2024, to a range between 5% and 5.5% of GDP in 2025, with the goal of reaching the 3% that Brussels demands in 2029.

What the tenant of Bercy (as the French Ministry of Economy is commonly known) proposes is “a little more flexibility to preserve growth.” An objective that is complicated, since the Bank of France has lowered its economic expansion forecast for this year from 1.2% to 0.9%.

These statements occurred yesterday, at a time when the Executive began talks with the parties. The Minister of Economy himself, Eric Lombard, met this Monday with the Socialist Party and the centrist group MoDem. It is expected that throughout this week he will continue meeting with the other groups to address their demands regarding the 2025 public accounts project and to reach a consensus.

In order to find this savings of 50,000 million, the Minister of Economy said that “it is basically about savings.” On the one hand, he ruled out new taxes because “there is already an adequate structure.” Furthermore, since François Bayrou has decided to resume the examination of his predecessor’s draft budget instead of starting from scratch, Parliament will not be able to add new fiscal measures to the text, but simply refine or delete those already debated at the end of the last year

Likewise, the head of Economy said he “agrees” with the 20% minimum tax on high-income earners proposed by the previous Executive.

They also hope to maintain the surcharge on the Scoiedades tax that Barnier had proposed that was agreed with the employers’ association (Medef) during the Christmas holidays. “This agreement remains, so we will work on a mechanism that would allow income of around 8 billion euros in 2025,” explained the minister.

Finally, it is open to the “single tax” on capital income, currently set at 30%. “In developed countries, the flat tax is between 30% and 35%. We have some margin,” he explained.

Even so, all these issues, as well as the debate on pensions, will have to be debated with the rest of the political groups, since there is not a sufficient majority in the National Assembly to allow the project to move forward.

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The Government of France sets savings of 50,000 million in the 2025 Budget