“Everyone will take their part”: Michel Barnier wants a “fair” and “balanced” effort on the 2025 budget

This is a real test for Michel Barnier. While he is due to present his 2025 budget project this Thursday evening marked by 60 billion in savings, the Prime Minister wants the effort “to be fair” and “balanced”.

“We are going to ask for an effort of 60 billion. I want it to be fair and balanced (…) Everyone will take their part, but we will preserve the means to do what I said,” he declared in detail on the sidelines of a trip to Poitiers (Vienna). He reaffirmed that he wanted to “require an effort from a certain number of actors”, such as “very large companies” and the wealthiest households.

A “perfectible” budget

“The attractiveness or credibility of the French signature must be preserved,” he also said. But this draft budget, which must be debated in the fall by Parliament “will be perfectible”. “I had to build it in two weeks. It’s not possible to do everything well in such a short time. Parliament will be able to improve it,” declared the Prime Minister. “We have already made adjustments and amendments, we have others which will be made by government amendment during the (…) budgetary discussion,” he added.

Prepared “in extreme urgency” and presented with an unprecedented delay in a timetable disrupted by the anticipated legislative elections, the draft budget plans to achieve two thirds of the effort, or some 40 billion euros, thanks to spending reductions. The State will be the largest contributor, to the tune of 20 billion euros. Civil servants are in the sights, while ministries will have to provide 5 billion in savings, in addition to a freeze of their credits. Social security must release 15 billion, in particular via the decried six-month postponement, to July 1, of the indexation of pensions (for 4 billion).

Aid for hiring apprentices will suffer a blow, as will reductions in charges. This increase in labor costs is criticized by Medef, the leading employers’ organization, which sees it as a threat to the competitiveness of French companies and “hundreds of thousands of jobs”. It is also planned to transfer a fraction of reimbursements for medical consultations to complementary health insurance and to reduce the contribution of Health Insurance to the financing of sick leave.

Local authorities are asked to participate in the effort for 5 billion euros, accused by the previous government of having let their expenses soar. They hope to be able to influence this drain during the parliamentary debate. Tax increases are also planned for 20 billion euros. A turnaround made in the name of “tax justice”, after seven years of aggressive tax reduction, in a country still champion of compulsory deductions and spending.

The 65,000 wealthiest tax households (i.e. 0.3% of the total) will pay an “exceptional” surcharge which would bring their minimum tax rate to 20%. And 300 companies whose turnover exceeds one billion euros will pay more than the 25% corporate tax rate for a year or two. Defending himself from any “fiscal shock”, Prime Minister Michel Barnier promised to spare “the most fragile” and “those who work”