A special law has been proposed to ensure budget continuity in France until a new finance bill is introduced in 2025. President Macron announced that this legislation aims to maintain essential services and prevent administrative paralysis if the budget is not approved by January 1. It will allow tax collection under 2024 rates without inflation adjustments, potentially increasing tax liability for some households. Despite its urgency, some lawmakers express concerns about its adoption, advocating for renewed budget discussions.
Special Law to Ensure Budget Continuity
In an effort to maintain the financial stability of the State, a ‘special law’ has been proposed as a temporary solution prior to the introduction of a new finance bill in 2025. During a speech on Thursday evening, President Emmanuel Macron revealed that the upcoming government will present this special legislation to Parliament by mid-December. This law aims to ensure that essential services continue to function in the absence of a formally approved budget by January 1st. Macron emphasized, “Public services will operate, businesses will be able to work, and our obligations will be met.”
Avoiding Administrative Paralysis
The special law serves as a crucial instrument for the government to prevent administrative paralysis—similar to a government shutdown seen in the United States—if the state budget is not approved by the deadline. According to Article 47 of the Constitution, the government can urgently request Parliament for authorization to collect taxes and initiate necessary expenditures for the State’s operations. The organic law concerning finance laws (LOLF) outlines two possible actions: either secure a vote on the initial part of the finance bill for 2025 by December 11th, a timeline deemed unfeasible, or submit a special law by December 19th to facilitate tax collection after January 1st. This approach buys time for the Parliament to ratify a thoroughly prepared finance bill in early 2025.
Budget Minister Laurent Saint-Martin announced on TF1 that the special law is “ready,” having been prepared in just five days following the government’s censure. The law is set to be introduced at the upcoming Council of Ministers meeting and is anticipated to reach the Finance Committee of the National Assembly around December 12 or 13. Following discussions in the National Assembly and the Senate, it is expected to be promulgated before December 31.
Under Article 45 of the LOLF, this special law will allow the government to continue collecting taxes based on the 2024 budget rates until the new finance law is approved. However, it will not include provisions for indexing income tax rates to inflation, which could risk unconstitutionality. As a result, approximately 380,000 additional households may find themselves liable for income tax, while 17.6 million existing taxpayers may experience an increase in their tax obligations.
The special law will also enable the payment of salaries for public employees and may include provisions for the French Treasury Agency to borrow, as well as ensure that Acoss, the Social Security treasurer, can continue its market borrowings. The legislation will likely contain a small number of articles—around four or five—focusing narrowly on ensuring the continuity of public services. Pierre Moscovici, President of the Court of Auditors, stated, “To avoid a shutdown, we will vote on a special law that will be extremely narrow and limited.”
Despite the urgency surrounding the budget, some members of the presidential camp, including National Assembly President Yaël Braun-Pivet, have expressed reservations about adopting the special law. She stated, “If we adopt a special law, a new budget will have to be presented by the government, and I do not support this position.” Braun-Pivet advocates for resuming budgetary debates to swiftly reach a compromise.