WORLD WORLDWIDE EUROPE FRANCE - news journal UPDATE - (en) France, UCL AL #361 - Unionism - State Budget: Austerity and Dead Ends (ca, de, fr, it, pt, tr)[machine translation]

 Bayrou is the champion of good, responsible management of public

finances. But he seems as blind and deaf to France's budget as he is to
the very Catholic high school in Bétharram! An impossible equation with
three unknowns: deficit reduction, no tax increases, and a doubling of
military spending. All this while the country's GDP is at a standstill:
+0.1% in the first quarter of 2025. ---- Already in 2024, in a minor
political scandal, the Macron government had constructed a disingenuous
budget, built on a deliberately overly high growth outlook. Lacking
magic, a rare commodity in economics, tax revenues were not forthcoming,
and EUR10 billion of planned spending was simply canceled: too bad for
local authorities and the civil service.

2025: Already 13 Billion in Frozen Credits
Ecological policies, research, and universities are the big losers of
2025. Thirteen billion vanished by simple decrees from January to May.
So, panic aboard the Raft of the Medusa, and everyone is rowing in their
own direction: elimination of the 10% tax deduction for retirees,
creation of a new housing tax, a promised referendum on everything and
nothing, a citizens' convention on social policies, a social conference
between employers and unions on the financing of social policies, the
creation of a so-called "social" VAT to replace the social security
contributions of employees and businesses... Total cacophony in the
government and among the leaderships of the "central bloc" parties.

This "social" VAT, desired by employers, is undoubtedly the greatest
danger facing us. First, because it would definitively end the social
model of funds created and managed by workers. Second, because it would
require a massive increase in VAT to offset the billions in
contributions flowing into the Social Security coffers. A higher VAT on
luxury goods alone would not generate enough revenue. VAT is the most
unfair tax because it is not progressive: a rich person doesn't pay more
for a baguette than a poor person. But the sleight of hand between
social security contributions and VAT is undoubtedly more politically
acceptable to public opinion if it is accompanied by an immediate
increase in wages. While the Social Security deficit stands at EUR23
billion, employer contribution exemptions will climb to EUR75 billion by
2023! The solution is simple. $40 billion in cuts by 2026
The French budget deficit is a long-standing problem with Europe, where
no country is supposed to exceed a 3% deficit. Bayrou has promised to
achieve this in three years, having already dropped below 5.4% in 2026.
A new austerity package: $40 billion! In other words, another chainsaw
cut in public spending, infrastructure (roads, bridges, rail, etc.),
social action, and civil servants. Especially when, at the same time,
Macron wants to increase the military budget from 1% to 3% of GDP to
meet Trump's demands on NATO funding.

Yet, the money exists among those who get rich without working. Unfair
tax policies have seriously widened inequality, particularly in the
transmission of inheritances. Between 1998 and 2021, the wealth of the
poorest 10% halved, while that of the richest 10% doubled! France has
once again become, as it was before 1914, a country of rentiers. The
pressure cooker will have to explode.

Jean-Yves (UCL Limousin)

https://www.unioncommunistelibertaire.org/?Budget-de-l-Etat-Austerite-et-impasses
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