The outgoing French government has prepared a "special" budget to keep the country running through the end of the year, after Prime Minister Michel Barnier lost a confidence vote in the National Assembly, which had rejected large parts of the proposed 2025 budget.
"It is ready," outgoing Budget Minister Laurent Saint-Martin told TF1 television on Monday about the "special law" prepared by the government that he said would allow France to continue to bring in revenue and take out loans to fund public services.
"In other words, it will avoid a ‘shutdown’," Saint-Martin said, referring to cuts in public services in the United States when budgets fail to pass.
The special law, which is to be presented at the next cabinet meeting on Wednesday, will allow the government to carry over the 2024 budget, while a new government is named and a new 2025 budget can be prepared and presented to the National Assembly.
Barnier presented an austerity budget aimed at reducing the deficit to five percent of GDP with €60 billion in tax hikes and spending cuts, which was rejected last week.
He pushed it through anyway, using article 49.3 of the constitution that allowed him to pass legislation without a debate – a move that triggered a confidence vote, which he lost.
French President Emmanuel Macron has promised to quickly name a new prime minister.
Macron under increasing pressure to rebuild government
He met Monday with heads of the ecologists and communists, but not the far right National Rally, which has said it would support the temporary budget law.
While the special budget law will buy time, it will not solve the problems linked to the absence of a 2025 budget, warned Saint-Martin.
Income tax will not be pegged to inflation, he said, and many people will end up paying more taxes.
And it will do nothing to cut the deficit, which stands at 6.1 percent of the country's gross domestic product this year, twice the European Union limit.
The new government will be tasked with presenting a fresh budget proposal to the National Assembly.
“I hope this will happen as soon as possible at the start of the year, but it will take weeks, it will take months,” warned the budget minister.
(with AFP)
