2025 Budget: The Government Adjusts Its Economic Ambitions in Response to Parliamentary Debates

The first concessions on the finance bill are announced even before the debates in the Senate.

Senators have begun discussions on the “revenues” section of the finance bill, a crucial text for the recovery of public finances. However, well before the debates began, the government already signaled its intention to relax certain measures initially proposed. This finance bill (PLF), along with the social security funding bill (PLFSS), aims to save 60 billion euros in order to reduce the public deficit to 5% of GDP by 2025. Despite the strict goals, several adjustments have already been decided.

Adjustments for Local Governments and Businesses

The government recently announced a reduction in the contribution from local authorities, initially estimated at 5 billion euros. This revision of the measure has been welcomed positively by local elected officials, particularly in the Senate, a chamber traditionally attentive to their concerns. Budget Minister Laurent Saint-Martin confirmed that this contribution would be reduced to less than 2 billion euros. Additionally, discussions are ongoing to refine the governance of the precautionary fund designed to support struggling local governments.

As for businesses, they are also expected to see some relief from the planned increase in employer social security contributions. While the government had initially planned to recover 4 billion euros by raising these contributions, the minister announced that only 2 billion euros would be requested, in order to avoid penalizing small businesses and employees on minimum wage.

A Compromise on Pensions and a Strengthened Justice Budget

Another notable concession is the pension de-indexing measure, which had sparked strong criticism. Initially intended to save 4 billion euros, this measure has been relaxed after negotiations, and pensions will now be revalued from January, with a second adjustment for the lowest pensions in July. This partial pension revaluation will cost between 500 and 800 million euros, reducing the expected savings to around 3 billion euros.

Finally, after intense tensions regarding budget cuts in the justice sector, Justice Minister Didier Migaud secured an additional 250 million euros for his ministry, partly compensating for the nearly 500 million euros cut in the initial proposal.

Towards a Global Compromise or Extended Debate?

As the finance bill progresses, it is becoming clear that, while the ambitions to reduce the deficit remain intact, numerous adjustments will be necessary to ease parliamentary tensions and address stakeholders’ concerns. The discussions in the Senate, which began on November 25, promise many more concessions before the final adoption of the budget.