Finance bill, deficit reduction, tax increases… These burning issues awaiting Antoine Armand and Laurent Saint-Martin at Bercy

Antoine Armand and Laurent Saint-Martin were appointed respectively Minister of Economy and Industry and Minister of Budget and Public Accounts on Saturday, within the Barnier government.

A duo of young deputies at Bercy: Antoine Armand, 33, becomes Minister of Economy and Industry and Laurent Saint-Martin Minister of Budget and Public Accounts. Announcement by the Barnier government, Saturday, September 21. They succeed Bruno Le Maire and Thomas Cazenave and find themselves facing a very difficult budgetary equation.

Presentation of the draft finance bill

Their first mission: to be able to present the draft finance bill to the National Assembly at the beginning of next month. Given the very tight schedule, this bill should, barring any surprises, draw heavily on the recommendations of the Attal government and the preparatory documents sent this week by Matignon to certain parliamentarians. Around a key objective: not to spend more in 2025 than in 2024. That is a total amount of 492 billion euros for the various ministries. Which in reality means the equivalent of a reduction of around ten billion euros given the expected inflation – a little below 2% next year.

Tax increases and taxation of superprofits

But this relative effort, already assuming measures that are undoubtedly unpopular, such as for example a refocusing of Ma Prime Rénov’ or the bonus on the purchase of an electric vehicle, seems far from sufficient to reach the theoretical target of a deficit of 4.1% of GDP. Especially since this year’s target, 5.1%, does not seem able to be maintained despite the freezing of 15 billion euros of credits already announced by Bruno Le Maire in recent months. The cause is the continued slippage of certain expenses (local authorities are particularly singled out) and lower than expected revenues (notably those from corporate tax).

Does this mean that additional savings will have to be made in 2025 and that tax increases should also be considered? No tax increases for the middle classes, in any case, assures Michel Barnier’s entourage. Which could implicitly open the door, on the other hand, to measures concerning the highest incomes – such as a tax on “super profits” or “super dividends” paid to shareholders by the largest groups. Not to mention other avenues drawn up by the Bercy services and practically ready to use, such as a tax on share buybacks practiced by certain companies.

Bring the deficit below 3%

But the most painful part will probably be having to cut spending, more than what the provisional documents drafted by the previous government envisage. And to take responsibility for it… Also take responsibility for the possible postponement, after 2027, of the objective of bringing the deficit below 3% despite the commitments to this effect made to the European Commission and despite the possible risks of a future downgrade of the French rating by the rating agencies.