what else “by all means” looms

Faced with rising prices, the government wants to strike fast and hard. Bercy has been working for weeks on his great anti-inflationary law, designed to protect the purchasing power of the French. A very political text, which he even promises to adopt in the Council of Ministers before the legislative elections for adoption at the very beginning of the summer. While inflation promises to exceed 5%, first of all, he does not intend to forget anyone. Measures are also added, often worth billions of euros. The addition promises to be salty.

Steps to leave no one behind

For example, with regard to the energy bill, the government has already promised to extend until the end of the year the gas tariff shield, which was originally supposed to end in June. Everything will depend on the amount of the gas price, but for these additional six months, expect a bill of more than 6 billion euros. The same for the electricity cover. The shortfall of EDF is estimated by the company at more than 8 billion euros for the first shield… there is no reason to extend the semester for it to be less…

In addition, the executive branch wants to continue helping motorists by extending after July 31 a discount of 18 euro cents per liter of fuel. He did not specify how long the measure would last, but in 4 months the device is already worth more than 3 billion euros.

This text of the law will also have a component to help the most modest French to shop. So the food check should see the light of day. The amount of this presidential pledge has not yet been disclosed, as well as the number of beneficiaries, but we can also expect several billion euros.

In addition, the law provides for the abolition of TV license fees for 23 million households. Or more than 3 billion euros less for the public treasury.

Reindexation of old-age pensions will also be carried out from July to protect the income of pensioners. There, too, arbitrage did not quite work in terms of the cursor – will it be 4.5% by 5%? – but according to experts, one point of reindexing pensions is equivalent to another 2.5 billion euros for public finances.

For the beneficiaries of social minimums – RSA, AAH, etc. – a gesture is planned this summer… Exceptional indexation, which should exceed one billion euros.

Also in the program are measures to encourage companies to increase wages, and in particular to use Macron’s tax-free and gratuitous bonus … i.e. significant shortfall in terms of tax resources….

Not to mention targeted assistance to companies that consume large amounts of intensive energy, such as metallurgical plants, chemical facilities, etc. etc.

Account in tens of billions of euros

However, without a full stop, the list is already long. And promises to cost the state dearly. “It is impossible to give an exact total figure, because not all arbitrations have been made,” Bersi’s adviser admits, “but it will amount to tens of billions of euros.”

Since autumn, the government has already spent more than 26 billion euros to help the French cope with rising prices. “It is possible to maintain or even exceed these amounts,” says the same source.

But most accept it. Laurent Saint-Martin, Budget Rapporteur, assures Gallery : “That’s our bias: to protect, not to repair.” And to clarify: “Regarding the Covid crisis, we agree to slightly widen the deficit curve to help the French get through this difficult time and ensure that these inflationary effects do not hurt our economy, our consumption, our production.” Some will see the return of form “at all costs”…

A deficit that will exceed the expected 5%

One thing is certain: the deficit forecast included in the finance bill – 5% – will be exceeded.

On the other hand, the government hopes to restore fiscal freedom next year thanks to a more favorable macroeconomic environment. As long as he commits not to raise taxes for five years, and also not to increase debt, which has already reached over 113% of our GDP, with interest rates rising, he is counting on his pension reform to rake in billions of euros quickly.

That is what he hopes to explain to the French. In other words, work longer to better protect against inflation. The bet seems risky given the difficulty of passing this sensitive reform. Most French people are opposed to raising the statutory retirement age from 62 to 64, and all trade unions, including the CFDT, have already expressed their opposition to the reform.

Emmanuel Macron’s Anti-Inflation Law: Why It Blocks