Does Emmanuel Macron foresee 80 billion euros in savings and an increase in VAT, as Jean-Luc Mélenchon says?

This is Nupes’ new angle of attack. Right between the two rounds of the legislative elections, several members of the left alliance sometimes denounce “the hidden program by Emmanuel Macron”sometimes “the government’s hidden agenda”. The president would have “committed to Europe to restore the country’s deficit to 3%, which represents 80 billion euros” savings, castigated Jean-Luc Mélenchon, Tuesday June 14, in an interview with Parisian (link reserved for subscribers). A week before, he had already mentioned these “80 billion euros per year” at the microphone of France Inter.

This assertion was echoed by other Nupes representatives. Olivier Faure thus evoked on France 2, Monday, “a plan which states an obligation to save 80 billion per year”. For the first secretary of the PS, it would pass “presumably” by one “increase in VAT”a scenario also mentioned by Jean-Luc Mélenchon.

But what are these claims based on? At the microphone of franceinfo, Tuesday, Adrien Quatennens, coordinator of La France insoumise, mentioned the existence of a “to copy” forwarded to the European Commission, in which Emmanuel Macron “propose a return to the 3% deficit”.

The L’Insoumission website, published by La France insoumise, refers to the “PStability Program 2021-2027″, drafted by the Directorate General of the Treasury and submitted to the European Commission in April 2021. This 89-page document is public and accessible on the website of the Ministry of the Economy. public finance trajectory objectives Usually, a new version is sent to Brussels every spring. But this year, its publication was postponed until the beginning of the summer due to the elections, as explained The world (link reserved for subscribers).

The latest version of this roadmap provides for remedying the shortfall “below the 3% threshold in 2027”. After a deterioration in the public accounts in 2020 and 2021 due to the health crisis, the government anticipates a gradual improvement in the situation “over the period 2023-2027”. According to its projections, the public deficit would reach 5% of GDP in 2022, drop below 4% in 2024, before falling to 2.8% in 2027.

By achieving this objective, France would therefore enter into the nails of the Stability and Growth Pact, which requires the countries of the euro zone to maintain their public deficit below 3% of their GDP. Several countries, including France, have regularly deviated from these criteria, particularly during the economic crisis of 2008-2010. Between 2017 and 2019, the state had however managed to meet this objective, before the economy was weighed down by the reactions of the health crisis.

Emmanuel Macron has never hidden his desire to reduce the public deficit. “I want (…) to keep our public finance anchors, which should start reducing the debt from 2026 and bring the deficit back below 3% of GDP in 2027”he declared in March during the presentation of his program for the presidential election, as the rapporteur The echoes.

However, at no time did the president mention the need to achieve 80 billion euros in savings to achieve this. This figure does not appear in the Pstability program 2021-2027. So how does Nupes arrive at such a sum? It bases its calculation on INSEE data. In 2021, France’s deficit was 160.9 billion euros, or 6.5% of GDP. If the level of GDP remained simplified, it would reduce the deficit by half, more than 80 billions of euros, to approach the 3% mark.

But this objective is set for 2027. The budgetary effort would therefore be spread over the whole of this period. A note published in January by the Institut Montaigne, a liberal think-tank, believes that we should “to achieve savings for an amount of almost 15 billion euros per year and around 70 billion over the whole of the next five-year period”. This estimate, however, is only a “tendency”who stays “difficult to estimate and therefore potentially fallible”due to the uncertainty on the evolution of the economic context, warn the authors.

Bruno Le Maire, meanwhile, refuted Wednesday on France Inter the figure of 80 billion brandished by Nupes. The Minister of the Economy says he plans “40 billion euros in savings” over the entire five-year period, the source of which he detailed: 10 billion would be saved as part of the pension reform, 20 billion would be found in the state budget, and 10 billion in that of local authorities. He challenges the idea that cutting spending would be the only way to meet Emmanuel Macron’s goal : “What mainly makes it possible to reduce deficits and the debt, (…) it is growth, it is employment”he assured the same day on LCI. Growth that would reduce the amount of savings needed to get the deficit back on track.

This idea is also included in the government’s 2021-2027 Stability Program “Such a trajectory can be achieved by resolute action to support potential growth”, writes the Treasury. Who, however, believes that the objective also involves a “control of the progression of public expenditure”. The text mentions the pension reform, considering that “the financial sustainability of the system is not assured with the current parameters”. In local authorities, the Treasury presents itself as a need to continue the use of contract workers, expanded by the 2019 civil service transformation law. “Transversally, better efficiency of public spending should be sought”summarizes the document.

Several members of the Nupes agitate on their side the risk that the government has recourse to a rise in the VAT to increase the receipts of the State, and thus to reduce the deficit. “We have information, some elements, which lead us to believe that in the drawers of Bercy, there is a project which is to increase a part of the VAT”, assured Olivier Faure on France 2 on Monday. Contacted by franceinfo, the PS boss says he relies on “information from senior Bercy officials”, without further details. LFI deputy Alexis Corbière, for his part, spoke more cautiously of a “hypothesis” on BFMTV. On the side of the Ministry of the Economy, we denounce to franceinfo a “fake news”. Asked about this question on Wednesday on France Inter, Bruno Le Maire took “commitment” that there would not be “no increase in VAT during the five-year term”.

It remains to be seen whether the objective of reducing the deficit to 3% by 2027 is tenable without resorting to such measures. A poor economic recovery could contradict the government’s plans. “Emmanuel Macron is counting on economic growth and the return of full employment. He makes the optimistic assumption of growth of 1.8% and unemployment at 5%. It is a hypothesis without economic crisis, health, armed conflict…”, warns Eric Heyer, economist at the OFCE, interviewed by franceinfo. The international context, marked by the war in Ukraine, makes five-year projections complex. The OFCE has also recently lowered its growth expectations for 2022. (link to a PDF file). “The fall in unemployment will be very slow”, also anticipates the economist.

However, the “3% rule” is not set in stone. LThe budgetary targets of the Stability and Growth Pact have been suspended until the end of 2023 to allow economic recovery after the health crisis. “European rules do not require us to be at 3% at the end of Emmanuel Macron’s five-year term”, explains Eric Heyer. Alain Trannoy, professor at the Aix-Marseille School of Economics, reminds the Figaro (link reserved for subscribers) that “the Covid crisis, inflation and the situation in Ukraine could push the EU to reconsider fiscal stabilization rules”.

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