France Braces for Fierce Budget Battle: Tax Hikes and Deficit Debates Stir Tensions in Parliament
October 21, 2024
Jordan Bardella, president of the National Rally (RN), has indicated that the party may consider a vote of censure against the government if certain 'red lines' in the budget are crossed.
The National Assembly is currently debating the 2025 budget proposal, which outlines €60 billion in initiatives, including €40 billion in spending cuts and €20 billion in new tax revenues.
As the parliamentary debate began on October 21, the French government is grappling with the challenge of securing a majority for the budget.
Economy Minister Antoine Armand has stated that the budget aims to reduce the public deficit to 5% of GDP by 2025 without resorting to austerity measures.
However, internal pressures are mounting within the ruling coalition, particularly regarding tax policies, as factions disagree on issues related to corporate taxes and taxes on high-income earners.
Prime Minister Michel Barnier criticized proposed tax increases from left-wing opposition parties, labeling them as 'unbearable' due to their potential adverse effects on businesses and household purchasing power.
In the education sector, unions are demanding the cancellation of over 4,000 planned job cuts, arguing that these cuts will negatively impact education quality.
Frédéric Valletoux, head of the social affairs committee, suggested postponing pension adjustments to protect smaller pensions amid the ongoing budget discussions.
Lawmakers from flood-affected areas are urging the government to exempt these regions from proposed budget cuts due to recent natural disasters.
On the first day of the debate, La France Insoumise (LFI) withdrew its preliminary rejection motion for the budget, a strategic decision reflecting the current political landscape.
A majority of deputies are advocating for greater 'fiscal justice' in response to the supply-side policies implemented since 2017 by the French President.
Budget Minister Laurent Saint-Martin emphasized the government's commitment to avoiding excessive taxation, contrasting with the opposition's push for budget amendments.
Summary based on 62 sources
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Sources

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