REPLAY. 2025 Budget: 4,000 teaching posts cut, tax increases… discover the measures presented by the Barnier government

Michel Barnier à l'Assemblée nationale le 9 octobre 2024. MAXPPP – Vincent Isore

This Thursday, October 10, 2024, Michel Barnier's government will unveil the budget for next year. The Prime Minister is due to speak early in the evening while the Assembly is more than divided and the State's debt is significant.

What to remember:

At the Council of Ministers, Michel Barnier will present his roadmap for the 2025 budget. The Prime Minister has a specific objective: to find €60 billion of room for maneuver, i.e. €40 billion in savings in the functioning of the State but also €20 billion in additional revenue, in the form of taxes in particular. Find the main measures proposed by the Barnier government here. 8:10 p.m.

2% increase in tax brackets

The government plans to increase the income tax brackets by 2% in 2025 in order to “protect the purchasing power of the French” , which will represent a shortfall of 3.7 billion euros for the State, according to the draft budget presented on Thursday.

This measure “allows nearly 530,000 households to avoid being subject to income tax. It protects the French from an increase in taxation linked to inflation” , indicates this text.

9:42 p.m.

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9:25 p.m.

“A calamity” for Mélenchon

“4,000 fewer jobs in Education. After spreading misery, here is the organization of ignorance. This budget is a calamity” , wrote the LFI leader on his X account (ex-Twitter).

4000 postes en moins dans l'Éducation. Après avoir propagé la misère, voici l'organisation de l'ignorance. Ce budget est une calamité.

— Jean-Luc Mélenchon (@JLMelenchon) October 10, 2024

9:22 p.m.

Discover the main measures

The French government presented on Thursday a draft finance law (PLF) for 2025 which provides for a budgetary effort of 60.6 billion euros via a reduction in public spending (41.3 billion) and increases in tax revenue (19.3 billion). The Social Security Financing Bill (PLFSS) for 2025 was also examined in the Council of Ministers, with a forecast deficit of close to 16 billion euros in 2025.

Discover the main measures proposed by the Barnier government here .

8:39 p.m.

A “necessary effort”

By presenting his draft budget to the Council of Ministers on Thursday, Michel Barnier wished to “prevent a crisis whose first victims would be the weakest among us” , and reiterated that it was a “necessary, shared and targeted effort” , according to government spokesperson Maud Bregeon.

The Prime Minister “recalled” his “desire to be responsible rather than popular” . He defended a “necessary effort” , “shared” and “targeted distributed in the most equitable way possible” , stated Ms. Bregeon in her press report of the Council of Ministers.

8:23 p.m.

500 million euros less for justice

The budget of the Ministry of Justice will be set at 10.24 billion euros, almost 500 million euros less than what was planned, according to the draft finance bill presented on Thursday, which confirms the fears of former Minister of Justice Eric Dupond-Moretti and magistrates.

This amount is a very slight increase compared to the 2024 budget (+0.11 billion euros), but remains lower than the 10.68 billion euros that were planned for 2025 in the justice programming law, adopted in October 2023.

8:21 p.m.

A debt of 16 billion in 2025

The government is aiming for a social security deficit of 16 billion euros in 2025 after 18 billion euros in 2024, according to the social security financing bill (PLFSS 2025) presented Thursday in the Council of Ministers.

The budget presented by the government plans to contain the increase in health spending (national health insurance spending target, Ondam) at +2.8%, after 3.3% in 2024, which requires health insurance to make savings of around 4 billion euros compared to the natural evolution of its spending.

8:19 p.m.

France will raise 300 billion on the markets to finance itself

France will raise a record amount of 300 billion euros in 2025 to finance its spending and renew its previous debts, after 285 billion euros for 2024, the Agence France Trésor (AFT) announced on Thursday, on the sidelines of the budget presentation.

The French debt that will be raised on the financial markets in 2025 should correspond to 10% of French GDP in 2025, “a relatively stable figure compared to previous years”, however, qualifies Antoine Deruennes, general director of the AFT. In 2024, French sovereign debt issued on the markets should represent 9.8% of GDP, after 9.6% in 2023.

8:17 p.m.

Limited drop in electricity prices to 9%

The government is planning a limited drop in the regulated electricity price to 9% on February 1, as a result of the increase in a tax that should represent 3 billion euros in revenue for the State, according to the draft budget presented on Thursday.

This involves adapting “the normal excise rates at the end of the tariff shield in order to guarantee the consumer a 9% reduction in the regulated sales tariff in 2025 from February 1”, the text indicates, while the Energy Regulatory Commission (CRE) had announced in September that the French could expect a reduction of “at least 10%.

8:09 p.m.

Penalty for thermal cars, reduced bonus for electrics

The new penalty on the purchase of new polluting cars will affect almost all gasoline and diesel vehicles from January 1, 2025, according to the draft budget for 2025 presented Thursday.

The bonus envelope for the purchase of electric cars increases from 1.5 to 1 billion euros and will finance “as a priority the most modest households” .

8:08 p.m.

Creation of a tax on share buybacks by large companies

The government plans to tax share buybacks followed by cancellations carried out by large companies with a turnover of at least one billion euros, which should bring in 200 million euros per year, according to its draft budget for 2025 presented Thursday.

This tax would be 8% on the amount of the capital reduction. It aims to “put to contribution companies that increasingly resort to this practice, allowing them to distribute part of their excess cash to their shareholders”, the government said.

8:07 p.m.

400 large companies will have to pay an “exceptional contribution”

The French government plans to subject around 400 large companies to a “exceptional contribution” on their profits made in France in 2024 and 2025 in order to participate in the recovery of public finances, according to the draft budget for next year presented on Thursday.

This measure, which concerns companies with a turnover of at least 1 billion euros, should bring in 8 billion euros in 2025 and 4 billion in 2026.

8:06 p.m.

Large maritime transport companies taxed

The French government plans to introduce a “exceptional tax”on large maritime freight companies, which should bring in 500 million euros next year, in its draft budget for 2025 focused on the recovery of public finances.

This tax “will apply for two financial years to maritime transport companies whose turnover is greater than 1 billion euros” , the government specified, which then expects 300 million euros in 2026.

8:06 p.m.

4,000 fewer teaching positions

The 2025 budget for National Education, the largest item of state expenditure, provides for 4,000 fewer teaching positions compared to 2024, mainly in nursery and elementary schools, the ministry said on Thursday.

Rue de Grenelle justifies this reduction in teaching posts by “the reduction in the number of pupils which should accelerate with 97,000 fewer pupils at the start of the 2025 school year”. The National Education budget for 2025 amounts to 63 billion euros, broadly stable compared to 2024.

8:04 p.m.

A “temporary and exceptional” contribution for the most affluent households

The French government plans to introduce a “temporary and exceptional contribution” for three years targeting the most affluent households that would bring in 2 billion euros in 2025, in its draft budget for 2025 focused on the recovery of public finances.

This mechanism would guarantee the taxation of these households at a minimum average rate of 20%, according to the government. It concerns those who are already subject to the exceptional contribution on high incomes (i.e. a reference income of 250,000 euros for a single person and 500,000 euros for a couple).

7:53 p.m.

“A shock”, for Éric Woerth

“It's true that 2024 is a difficult year. It was a shock to have such a large forecast gap, and we will definitely have to clarify the matter, particularly on our revenue forecast models” , judges Éric Woerth, the former minister in François' government Fillon.

"2024 est une année difficile. Cela a été un choc d'avoir tant d'écart de prévision, et il faudra définitivement éclaircir la chose, notamment sur nos modèles de prévision de recettes", souligne @ericwoerth.#Budget2025 #DirectAN pic.twitter.com/3jhLRp7Cwc

— LCP (@LCP) October 10, 2024

6:16 p.m.

Forecasts deemed “fragile “

The forecasts published by the French government in its draft budget for 2025 are “fragile” , judged the High Council of Public Finances (HCFP) in an opinion issued Thursday before the presentation of the draft finance bill scheduled for early evening.

“The forecasts remain a little optimistic and the information is poorly documented, and as a result the results on revenue and expenditure are fragile” , affirmed its president Pierre Moscovici during a press conference, estimating on the basis of another method that the French budgetary effort will mainly be based on tax increases and not on a reduction in expenditure as affirmed by the government.

6:11 p.m.

Savings on unemployment insurance.

While tens of billions of savings will have to be made, the government is hoping for an additional 1.2 billion in savings on unemployment insurance.

More precisely, it is a question of making “400 million euros of additional savings per year, or a total of 1.2 billion euros over the three years of the Unedic agreement” , according to information from BFM Business .

6:06 p.m.

A divided Assembly

If France is in the midst of a political crisis, the announcement of the budget for next year should continue to divide the elected representatives of the Chamber. “We support a large part of the savings in Michel Barnier's draft budget”, indicated Thomas Cazenave, deputy of Ensemble pour la République.

“It is not normal to vote, for years, the budget of France with 49-3” , deplored the socialist Patrick Kanner.

🔴🗣 – "Ce n’est pas normal de voter, depuis des années, le budget de la France à coup de 49-3"

Patrick Kanner, sénateur socialiste, s’exprime sur l'action du gouvernement alors que le budget sera présenté aujourd’hui en Conseil des ministres.

📺#franceinfo #canal27 pic.twitter.com/ntS90PN1en

— franceinfo (@franceinfo) October 10, 2024

“Why do we always protect the richest ?” , wonders the leader of the left, Olivier Faure.

6:02 p.m.

“A perfectible budget”

While France's debt is colossal, Michel Barnier wants to make savings of 60 billion. To do this, he wants the “effort to be fair, to be balanced” .

“The attractiveness or credibility of the French signature must be preserved. It is a budget that can be improved, I had to build it in fifteen days, no Prime Minister has ever had to do it in fifteen days, it is not possible to do everything well” , he indicated during a trip to Vienne.

5:55 p.m.

Start of live

Hello, this live is dedicated to the presentation of the budget 2025 by the Barnier government.