In addition,
Drop compulsory levies since 2017:
The abolition of the housing tax for households. Therefore, the decline in employers’ social security contributions for businesses are the main factors for lowering compulsory levies, in the eyes of the institution.
The digging of the French public deficit since the arrival of Emmanuel Macron at the head of the state is explained by the drop in the rate of compulsory levies, said a note from the OFCE out just before the presentation of budgetary guidelines by the Prime Minister on Tuesday. Therefore, Economists of the French Observatory for Economic Conditions (OFCE) refute in parallel a drift of public spending over the period. Meanwhile, in this working document published on Friday.
The degradation of French public finances “Is not attributable to a more marked increase in public spending (…), but rather to drop compulsory levies since 2017 a significant decrease in public revenues”they summarize. As a result. the difference in deficit, and therefore increased debt, has been widening since 2019 with our neighbors to the euro zone. The abolition of the housing tax for households. Additionally, the decline in employers’ social security contributions for companies are the main factors for lowering compulsory levies, according to the OFCE.
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The expected public finance recovery plan – Drop compulsory levies since 2017
In its new simulations. based on the budgetary and structural level in the medium term (PSMT) transmitted last October to the European Commission and updated in April, the peasum peak would be reached in 2029, at 121.7% of GDP. The OFCE also expects the unemployment rate, currently at 7.4%, climbs to 8.1% this year and 8.9% in 2026, to then stabilize at 9% in 2027 for three years, before decreasing in 2030. “The adjustment required in the long term drop compulsory levies since 2017 to stabilize the debt to 110% of GDP is estimated at (…) around 100 billion euros of 2025”also specify economists.
The Court of Auditors estimated the necessary efforts at the end of July 105 billion. an additional expenditure or revenue) to bring the GDP in 2029 to the government. Prime Minister François Bayrou must unveil his public finance recovery plan on Tuesday afternoon. with the aim of giving 40 billion euros in savings in the 2026 budget which will be examined in Parliament in the fall.
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