France Court of Audit deficit reduction proposals, Digi Mart USA News: The Court of Audit has proposed a series of measures that could apply as early as next year to reduce France’s deficit, representing “up to 38 billion euros in savings.” The court’s first president, Amélie de Montchalin, said the proposals were not a counter-budget or an alternative budget.
Montchalin said the package contains 18 measures, all examined and costed by the court and all feasible and integrable in the short term, drawing on earlier work. She presented the report, titled “Contribution to the restoration of public finances, short-term measures and medium-term levers for action,” at a press conference.
To act on two of the largest items of public spending, social benefits (34% of the total) and the wage bill (22%), the court proposes not revaluing social benefits (excluding minimum social welfare), for an estimated saving of 4.8 billion euros in 2027. It also proposes suspending promotions and step increases in the civil service for one year, which would save 3.9 billion euros.
Carine Camby, president of the court’s first chamber, acknowledged that freezing promotions is “difficult for public employees,” but said it would have a “massive effect” on the trajectory of the wage bill. Such a measure could, however, fuel anger among civil servants, who have already been affected by a freeze on their index point and are being called to strike on November 17 by a civil service union coalition.
The court also suggests reducing the number of teachers by 5,000 full-time equivalents at the start of the 2027 school year, for savings of 100 million euros, citing changes in school enrollment. The proposal is controversial at a time of mobilization demanding more resources for education.
Other proposals include raising the intermediate VAT rate of 10% to 13% (for 4.3 billion euros), which would affect items such as restaurant meals and renovation work in older housing; better control of social contribution reductions (3.5 billion euros); and refocusing employment and vocational training policies (1.8 billion euros).
According to the report, the measures are aimed primarily at parliamentarians working to adopt a budget for France. They focus mainly on public spending but, for nearly a third of their total value, include reductions in tax or social expenditures, for a total of between 32 and 38 billion euros.
In a second part of the report, the court proposes medium-term levers to support a future multi-year public finance programming law, including strengthening the multi-year nature of the state budget and continuing spending reviews. In a separate note on tax expenditures, the court highlighted the accumulation of tax exemption schemes and their cost, which has nearly doubled in twenty years and weighs on public finances.
