The ax will soon fall again for France. After the downgrading of its sovereign debt by Fitch at the end of April, it is the Standard and Poors rating which is expected on June 2, so the government is getting active.
The government multiplies the proofs of its good faith, of its real will to reduce its deficit, and especially its astronomical debt, which today exceeds 3,000 billion euros. Even when Emmanuel Macron announces tax cuts for the middle classes, the President of the Republic limits them to only 2 billion, and above all postpones them until later, when the budgetary trajectory allows it, he says.
Companies fear that the promised tax cuts will be called into question, cuts in production taxes, 8 billion in all, but over 2 years. The first 4 billion cuts have indeed been granted this year, the second installment must take place next year, but the employers’ organizations which will be received on Monday May 22 by the Prime Minister at Matignon, want to obtain a guarantee that the reduction in production taxes will be included as planned in the next finance law.
Another tax cut seems postponed
It concerns inheritance rights, the candidate president had planned and included in his program a relief in two parts: lower the reduction on the amount of the inheritance, and extend it to inheritances in indirect line. This promise has already been postponed for the first time and risks, this time, being definitively buried.
France therefore gives many pledges of budgetary seriousness to the rating agencies. On paper, there are therefore no new massive tax cuts in sight, structural reforms in progress: that of pensions with an implementation, planned at all costs, on September 1, of work also with the presentation of France Travail on June 7, in the Council of Ministers. Not to mention the strengthening of the fight against tax and social fraud.
So many tokens of goodwill on the part of France to convince of its objective of restoring its public accounts, and to obtain from the major rating agencies, such as Standard and Poors, that they do not lower France’s rating, which which would, in theory, lead to higher interest rates.