Budget: the government is fighting its last battles

Posted 8 Dec. 2022 at 18:20

It was a day not to linger at the bar and to arrive late. This Thursday, the first part of the finance bill (PLF) for 2023 returned to the National Assembly for second reading and it did not take four minutes for the examination to be completed.

As soon as the session started, the Prime Minister went to the podium to engage the responsibility of her government and announce the adoption of this text without a vote by recourse to Article 49.3 of the Constitution. Is without doubt a speed record for the examination of a budget in the entire history of the Fifth Republic. In any case, a far cry from the atmosphere of the first 49.3 of October 19 for the first reading, which was then a political event after a week and 50 hours of debates which had white-hot the National Assembly.

Bronca of the oppositions

“France must have a budget on January 1 next […] and our debate time has been shortened by the systematic tabling of motions of censure”, justified Elisabeth Borne at the podium, after what constitutes the eighth 49.3 of the entire budgetary sequence (combining those drawn for the PLF and those for the Social Security financing bill). What to provoke the bronca of the oppositions, the president of the finance committee, Eric Coquerel (LFI), denouncing “a passage in force […] without any compromise”.

The Prime Minister wanted to escape this accusation by announcing that some of the amendments – right and left – voted by the Senate this week would be taken up by her government. These include, for example, the extension of the tax credit for private electric charging stations. “We have changed the safety net of local authorities by bringing it closer to the system adopted in the Senate”, also specified Elisabeth Borne.

Fiscal trajectory

With these various adjustments, the deficit forecast for 2023 remains at 5% of GDP. But we can already note the slight deterioration in a few indicators such as the debt (at 111.2% of GDP expected at the end of next year, against 111.1% a month and a half ago) which shows that “France at the ‘close to the euro’ touted in September by Economy Minister Bruno Le Maire remains an abstract concept.

New details will be given on Monday, with the examination – and probably a ninth 49.3 – of the second part of the PLF.

This will not be the only budgetary issue next week. The government and the presidential majority still hope to reach an agreement with LR for the adoption of the public finance programming law (LPFP). The joint committee between deputies and senators – which was to be held this Thursday – was postponed for a week as a failure loomed.

“Having an LPFP is very important vis-à-vis our European partners, but the positions of the two parties were too far apart to succeed,” explains Jean-René Cazeneuve (Renaissance), general rapporteur for the Budget at the Assembly. “We avoided a definitive failure which is not good for anyone. But in terms of negotiations, it’s sporty and tense, ”adds Jean-François Husson (LR), his counterpart in the Senate.

Battle over savings

This text – not legally binding – must draw the budgetary trajectory of the five-year term. The government has a goal of returning the deficit to below 3% by 2027, but the parliamentary right is demanding additional savings to give its consent. The presidential camp was ready for a gesture, promising between 5 and 8 billion. Not enough to coax LR who demanded 12 to 14 billion in savings at the start of negotiations, before ending at… 15 billion during the last hours.

Could the political context with the current election at the head of LR have participated in this rise in the auction? “This may have complicated the negotiations”, recognizes Jean-François Husson who also says he reacted to new government spending announcements – such as the new fuel check.

“We must tackle public spending, and this can go through the slowing down of the programming laws voted for certain ministries”, he believes. In the presidential camp, we are not ready to do anything to obtain an agreement. “Getting back to 3% in 2027 will already be difficult. There is no question of repeating the mistakes of 2008 by slowing down spending too quickly,” replies Jean-René Cazeneuve.

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