20 billion euros in savings is the objective that the government has set. The budget deficit widened in 2023, reaching 154 billion euros, or 5.5% of GDP, according to INSEE. A big gap, far from the 4.9% on which the executive was counting. Faced with these increasing figures, the government is looking for ways to accelerate growth.
At the dawn of the ratings released by the rating agency, the government is working to reduce costs. Indeed, the three major international rating agencies Fitch, Moody’s and Standard
A downgrading of the rating could have harmful consequences, particularly on interest rates which risk soaring. “If they (the rating agencies) decide to downgrade the rating, the interest rate on French debt will potentially increase. The repayment of loan interest will then be higher than in previous years,” warns Christophe R, insurance financial analyst. “Which will maintain a vicious circle and fuel the public deficit.”
Social protections, local authorities, tax on superprofits… all sectors are studied in order to cut spending.
Another spending plan is targeted by the executive: the taxation of annuities. An announcement which had the effect of a bomb, particularly among savers, who were worried about having to pay taxes on their savings. This Wednesday, April 9, Gabriel Attal provided details on the people affected by this tax.
As part of the questions asked to the government in the Assembly, Gabriel clarified this point of contention. In fact, the executive is attacking “the inframarginal rents of energy companies or undue profits linked to speculation in the context of inflation” and “not to seek out, as I can read here and there, the Livret A or the savings of the French”, specifies the Prime Minister. “We will never attack French people who work,” he reassures.
The contribution on the inframarginal rent from electricity production (Crim), within the framework of the 2023 finance law, made it possible to tax energy companies on the exceptional income generated.
The only downside is that this tax brought in “only 300 million euros, or ten times less than what was planned and anticipated”, specifies Bruno Le Maire, Minister of the Economy.
This year, the government wants to focus on corporate superprofits. “I am ready, after having implemented taxation on digital giants and international taxation on very large multinationals, to implement minimum taxation at the international level on the highest incomes”, underlined Bruno Le Maire .
To avoid driving away businesses, this tax can only be done “at the European or international level, otherwise we risk seeing these people leave our country”, indicated Bruno Le Maire.
Concerning this proposal, Thomas Cazenave, Minister Delegate for Public Accounts of France, will have to outline the contours of the notion of “taxation of annuities”.