The French government pushed the first chapter of its 2024 budget bill through parliament without a vote on Wednesday amid growing fears that the European Commission could slap France with an excessive deficit procedure in the spring.
The annual Budget Bill, which sets out all government spending, is divided into different chapters, each of which is adopted separately. Here, MPs could not vote on the chapter dealing with revenues.
“The conclusion is clear: no group is prepared to vote for this budget bill,” Prime Minister Elisabeth Borne told the National Assembly minutes before announcing her intention to bypass MPs on Wednesday.
Under the French Constitution, the government can trigger Article 49.3 to bypass MPs unless a motion of no-confidence in the government is tabled and receives enough votes within 48 hours, as was the case with the passage of the controversial pension reform bill earlier this year.
But invoking the constitutional provision to bypass MPs is “a democratic scandal, said far-left MP and president of the National Assembly’s Finance Commission, adding that the lack of any debate on the country’s budget is “intolerable”.
Borne is “trampling over national representation [institutions] and opposition forces,” far-right lawmaker Caroline Parmentier added.
As for the conservative right, Les Républicains, the budget proposals were even too tame and unambitious.
Both the far-left La France Insoumise and the far-right Rassemblement National have tabled no-confidence motions, which are unlikely to pass given the conservatives’ vow not to support either.
A matter of life and death
The draft budget includes €16 billion worth of spending cuts as the government gradually phases out the so-called “energy tariff shield” in 2024, abolishing it by January 2025.
First introduced in 2021, the scheme was extended in early 2022 following the start of Russia’s invasion of Ukraine to protect consumers from runaway energy prices.
New money should also go into fighting climate change, as the green budget has been upped by €7 billion to top €40 billion in 2024.
Passing the budget is a matter of political life and death for the government.
While France’s public debt is one of the highest in the EU, at 109.7% of GDP in 2023 and 2024, before falling to 108.1% in 2027, its public deficit, currently at 4.9% of GDP, is expected to fall to 4.4% in 2024 – well above the 3% threshold set by the EU treaty.
While budget rules had been lifted during the pandemic to account for exceptionally high public spending, they are due to return on 1 January 2024 – sparking concern among observers that the Commission may consider triggering a so-called excessive deficit procedure (EDP) against France in the spring.
This view has been echoed by France’s financial watchdog, which has called France’s deficit projections for the next three years “optimistic”.
“The budget contains very few structural spending reduction measures,” the watchdog added in a policy note, arguing that public spending will increase in 2024.
Meanwhile, credit rating agencies will review their ratings for France over the next month, starting with Moody’s on Friday.
(Theo Bourgery-Gonse | Euractiv.fr)
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