The French President’s planned budget has been criticized.
(Photo: Reuters)
Paris The National Assembly in Paris has been debating the draft budget for the coming year since Monday. President Emmanuel Macron’s government has presented a crisis budget with billions in aid to combat high energy prices, which leaves no room for restructuring French public finances.
The resistance of the opposition is great – and since the defeat of his center alliance in the parliamentary elections in June, Macron no longer has his own majority in the National Assembly. In order to get his budget law passed, he is likely to resort to an extraordinary means: a clause in the French constitution that allows the president to enact the budget without parliamentary approval.
There is speculation in Paris that the government could stall the first reading in Parliament by the end of this week and pull Article 49.3 of the Constitution. Budget Minister Gabriel Attal dodged the question on Monday. “We’ll see how the debates go,” he told radio station France Inter.
However, Attal noted that the opposition parties collectively tabled more than 3,500 amendments to the budget. That is “a record number”. The discussion in Parliament is important, but there should be “no hindrance and no will to block”.
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The conservative Republicans complain about the lack of savings in the draft budget. The alliance of the left-wing populist party Inflexible France with the Socialists and Greens, on the other hand, is calling for social spending to be increased significantly. Marine Le Pen’s right-wing populist Rassemblement National believes the budget is under the dictates of the EU.
The budget expert Lisa Thomas-Darbois from the Paris think tank Institut Montaigne told the Handelsblatt that she saw “very little opportunity for a compromise”. The left-wing alliance and the Le Pen camp are fundamentally opposed to the government’s financial plans because they envisage a return below the European deficit limit of three percent of gross domestic product by 2027.
The right-wing populist claims that Macron’s budget is influenced by the EU.
(Photo: Reuters)
Republicans have made lower inheritance taxes and billions of dollars in savings by cutting bureaucracy their core demands. Macron’s alliance could theoretically accommodate them here, but the deliberations in the Finance Committee of the National Assembly did not indicate this. “We are very likely moving towards Article 49.3 of the Constitution,” Thomas-Darbois said.
The government presented the draft budget at the end of September. Finance and Economy Minister Bruno Le Maire spoke of a “responsible budget” that should “protect” the French in times of great economic uncertainty. The impending slump in economic growth should not be exacerbated by austerity policies.
Paris wants to further cap the electricity and gas tariffs for households in 2023, the costs are around 45 billion euros. By skimming off profits from energy companies, the net costs for the state should ultimately only be around 16 billion euros.
Government optimistic about economic development
The budget law also provides for the defense budget to be increased by three billion euros. Paris also wants to spend more money on the police and judiciary as well as education and climate protection. Taxpayers should be protected from the effects of cold progression by taking high inflation into account when calculating income tax.
till leak
45
billion euro
is it going to cost France to cap electricity and gas tariffs for households in 2023?
Paris expects the budget deficit in 2023 to be five percent of gross domestic product (GDP), like this year – but is based on a comparatively optimistic economic forecast. While experts also believe a recession or at least zero growth is possible in France, the Ministry of Finance is counting on GDP growth of one percent in the coming year.
In principle, the French government is sticking to its roadmap for reducing the budget deficit in the coming years. At the same time, it was pointed out in Paris that other EU countries, and Germany in particular, were currently spending a lot of money fighting the consequences of the energy crisis.
According to the constitution, Macron’s government has 70 days to pass the budget in parliament – that is, until December. During this time there are two readings each in the National Assembly and in the Senate, the second French chamber of parliament. Finally, the entire package is voted on again.
>> Read here: Despite the slump in growth, France is sticking to its budgetary targets
The decisive parliamentary chamber is the National Assembly. With the help of Article 49.3 of the Constitution, Macron can declare the debate over at the various stations there and avoid voting. MEPs have the option of using a motion of no confidence to resist the government pushing through the budget without a parliamentary vote.
However, it is questionable whether this motion of no confidence would then get a majority. Not only would the government have to resign, Macron has also threatened to dissolve the National Assembly if he does. However, the Republicans in particular have no political interest in new parliamentary elections at the moment, says Thomas-Darbois.
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