the government is counting on 20 billion euros in savings in 2025

With lower growth and a higher deficit than expected, according to the government, the savings to be made will be twice what was envisaged.

The French economic situation is significantly worse than expected and growth less strong than expected. On February 18, the government lowered its forecast from 1.4% to 1% and the 4.9% deficit that the government was targeting in 2023 was largely exceeded. For several days, the government has been preparing people for budget cuts, but the potion turns out to be much more bitter, the turn of the screw much more severe, since according to Bruno Le Maire the 10 billion credits canceled this year will only be a first step, there will be others future savings. Thomas Cazenave, the minister responsible for the budget, suggested on Wednesday March 6 that this could be around 20 billion euros by 2025.

We don’t know where the government is going to cut, except that it is looking everywhere. Given the amounts mentioned, he plans to cut into the state budget, which represents around 30% of expenditure global public authorities, but also on the Social Security side. At the moment, the executive is reviewing all positions, social assistance, health (for example, it is looking at long-term illnesses). And he has unemployment insurance in his sights. He does not hide his desire to save money and he puts pressure on the social partners who are currently negotiating on the employment of seniors.

On the other hand, protected budgets seem to be about security, but also defense. And the State refuses to increase taxes, even for the richest, because France already has one of the highest levels of taxes.

A risk of accentuating the economic slowdown

But economists, like Olivier Blanchard, warn of the consequences that these budget cuts can have. This professor at the Paris School of Economics, former economist at the International Monetary Fund (IMF), a recognized figure, believes that these blows do not come at the right time. Certainly, Olivier Blanchard recognizes that the State French lives beyond his means. But in a newspaper interview the worldhe also explains that when activity slows down, It is dangerous to reduce the deficit too suddenly, because it risks further accentuating the economic slowdown. Above all, given the scale of the issues (the ecological transition, the war at the gates of Europe), according to Olivier Blanchard, “we must be prepared to further support the economy, even if this implies a larger deficit for a while”.