what spending and what revenue to reduce the deficit to 5% of GDP?

Prime Minister Michel Barnier has promised an effort unprecedented in its scale, to reduce the deficit to 5% of GDP, estimated at 60 billion euros. Concretely, this supposes a reduction in expenditure of 40 billion and an increase in revenue of just under 20 billion. The reduction in spending which undoubtedly arouses the most comments and opposition, including within the Macronist camp, seems to be the postponement of the indexation of retirement pensions to next July 1st instead of January 1st. A measure expected to save around 4 billion euros, or 10% of the total objective of reducing public spending.

Faced with the bronca, Michel Barnier has also opened the door to a possible step back on this point but on condition that parliamentarians find another way to save the 4 billion! There are also another 4 billion expected from a reduction in tax reductions granted to businesses but without further details. Both Matignon and Bercy in fact refer to the presentation on Thursday October 10 of the finance bill for the details of the measures.

The only certainty is the wholesale distribution of the effort between the State, communities and Social Security. The State should somehow take responsibility for more than 20 billion euros out of the 40 billion in spending cuts. Or the biggest part. This should also involve the non-replacement of certain retiring civil servants or the merger of certain public organizations such as Business France and Atout France.

On the revenue side, Michel Barnier only spoke of an exceptional contribution requested from the wealthiest French people, more precisely of an increase or an overhaul of this very official contribution on the highest incomes (CEHR), created in 2012. She concerns taxpayers earning more than 250,000 euros per year or 500,000 in the case of a couple. Nearly 65,000 people in total according to Matignon’s calculations.

For businesses, the government targets the largest groups, generating a turnover of more than one billion euros. By undoubtedly temporarily raising their corporate tax rate which had been reduced by Emmanuel Macron to 25% for all companies. Another avenue announced: an increase in taxation of around 1.5 billion in favor of the ecological transition. That is to say, additional taxation measures targeting transport deemed polluting. However, the airline sector already fears being asked to contribute up to a billion euros, while the automobile industry fears not only a tougher ecological penalty, but also a reduction in the amount of the bonus for the purchase of an electric vehicle.