In the midst of fierce debate over the 2025 budget, which has already toppled one government, French Economy Minister Eric Lombard promised there would be no new taxes on individuals. The Senate is set to vote on the budget on Thursday.
“We will not raise taxes on households, retirees or salaried workers,” Lombard said on France 2 public television on Thursday, rejecting an idea put forward by Labour Minister Astrid Panosyan-Bouvet to have retirees with high pensions contribute more to funding social programmes.
Such a proposal is political poison in a country where seniors make up nearly a quarter of voters, and where pensions are a perennial subject of debate.
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The opposition far-right National Rally and hard-left France Unbowed immediately rejected the idea of taxing pensions. The prime minister’s office kept its distance, saying the idea was a "personal” proposal from Panosyan-Bouvet.
€60 billion deficit
The 2025 budget – introduced in October by then Prime Minister Michel Barnier, who lost a confidence vote after he pushed the legislation through without a vote in the National Assembly – must address a higher than expected €60 billion deficit, through taxes and cuts.
Prime Minister François Bayrou has tasked his government with proposing a budget that includes €32 billion in savings and €21 billion in revenue, to reduce the public deficit to 5.4 percent of GDP, down from 6.1 percent expected from 2024.
The long-term goal is to reach the Brussels-mandated deficit of 3 percent by 2029.
Lombard confirmed that a one-off corporate tax on the country's largest companies, intended to bring in €8 billion, will be limited to one year instead of two, and said that a tax on high incomes was still under consideration.
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Legislative marathon
The Senate is due to vote on the budget on Thursday, in the next step on its long path through the legislative process.
It is expected to pass with the right-of-centre majority, although the Socialist group in the chamber has warned it will vote against it.
The government has already made concessions to appease Socialist MPs, including backtracking on the elimination of 4,000 teachers' posts and agreeing to a renegotiation of the 2023 pension reform.
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The Socialists say they are waiting for the joint parliamentary committee reading of the bill, which is expected on 30 January, to make a final decision on whether or not to support the final version of the budget.
The government insists that a budget must be in place by the end of February to avoid a shutdown in public services, which are currently running under a special emergency budget law passed at the end of last year.
(with AFP)
