France Faces Heated Budget Battles: Coalition Tensions, Tax Hikes, and Deficit Woes
October 22, 2024As the French government prepares for intense parliamentary sessions, budget debates are expected to be contentious, with scrutiny coming from both the opposition and coalition members.
Frédéric Valletoux, head of the social affairs committee, controversially suggested postponing pension adjustments to protect smaller pensions during the ongoing budget discussions.
Various parties are pushing for additional changes, indicating that the upcoming budget discussions will be particularly tense.
In a surprising move, La France Insoumise (LFI) withdrew its preliminary rejection motion for the 2025 budget just before public examination in the National Assembly.
Despite this withdrawal, Eric Coquerel, head of the finance committee, stated that a motion to reject the budget will still be presented, although it is unlikely to pass.
The coalition of right and center parties was unable to prevent the adoption of a permanent tax on high incomes, which the government had initially intended to be temporary.
National Rally deputy Jean-Philippe Tanguy emphasized that voting for the rejection motion would ultimately benefit Michel Barnier.
Michel Barnier has warned against exceeding proposed tax increases of 30 billion euros in his budget project, highlighting the need for fiscal restraint.
Amid these discussions, Antoine Armand highlighted a simplification law aimed at creating savings, which had previously been halted due to government dissolution.
Budget Minister Laurent Saint-Martin condemned proposed tax increases from the left as 'irresponsible', arguing they would harm middle-class savings and small businesses.
Concerns are rising regarding the impact of France's public finances on lender confidence, especially amid discussions of significant tax increases.
The French Economic Observatory has revised the expected deficit for 2023 to exceed 5% of GDP, despite efforts for a substantial budget adjustment.
Summary based on 56 sources
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Sources
Yahoo News • Oct 20, 2024
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