Faced with massive fires, the executive wants to mobilize more volunteer firefighters

“The message I am sending is an extremely important civic message. Faced with the dramatic scale of the fires raging in France, the Minister of the Interior, Gérald Darmanin, resolved to “a solemn appeal” to employers in both the public and private sectors for “that in August , they release their employees who are volunteer firefighters” so “that they can join their colleagues everywhere on the national territory” in order to help them fight against the fires.

“We are coming to a time of fatigue for the firefighters”, warned the minister this Thursday during a trip to Aveyron, in the village of Mostuéjouls, evacuated the previous night due to the proximity of a fire. which ravaged 700 hectares in Lozère and Aveyron, and mobilized 600 firefighters.

“Eight large fires at the same time”

Professionals and volunteers have already fought several extraordinary fires since the beginning of a summer marked by a historic drought, further accentuated by successive heat waves.

This week, several major fires broke out again. “A completely extraordinary thing, we are at eight large fires at the same time”, indicated Gérald Darmanin, and eight departments are “particularly affected”. In Gironde, a month after the two gigantic fires which ravaged nearly 21,000 hectares, the fire resumed very violently on Tuesday near Landiras. More than 6,000 hectares have burned in a few hours and 10,000 people have already had to be evacuated.

A thousand firefighters from all over France are mobilized to fight against this fire which affects the Gironde and the Landes, and forced the authorities to cut the A63 motorway (Bordeaux-Bayonne axis). Prime Minister Elisabeth Borne announced Wednesday evening on Twitter that she would be there on Thursday with Gérald Darmanin.

Firefighters are also fighting smaller fires in Aveyron, Drôme, Isère and Pyrénées-Orientales. With, each time, reinforcements from other departments.

“A quarter of firefighters are mobilized on forest fires, which I believe never happened. And everywhere, including north of the Loire sometimes in territories that are not used to forest fires, ”said the Minister of the Interior. “We need to draw short-term consequences from all this.”

Help from European countries

In the meantime, France has asked for help from European countries. “The Swedes lend us from [jeudi] planes, the Italians no doubt in the next few hours, “said the minister. “This European mechanism allows us in any case in the next few hours to be able to concentrate other air resources”.

The government has been attacked in recent weeks, particularly by the left, over the lack of resources devoted to civil security and firefighters. “It’s not a controversial time,” reacted the Minister for Ecological Transition during a trip to Maine-et-Loire, where more than 1,200 hectares were destroyed by the flames, ensuring that the means of civil security had been increased “by 40%”. Asked about LCI, Christophe Béchu insisted on recalling that “95% of fires have human origins” and insisted on the safety instructions to be followed.


Hospital: the Minister of Health admits that emergency services are closed

Several emergency services are currently closed in France, acknowledged on Wednesday François Braun, the Minister of Health, who had until then refused to discuss such a situation in a context of concerns about the ability of hospitals to cross. the summer. “In terms of closures, that is to say an emergency service that would no longer welcome anyone, there were 4 before July, there are 8 today,” he said. he stated on RTL.

These remarks mark a change of speech of the minister who refuted any closure of emergencies, only evoking a regulated access of patients to certain emergencies, despite testimonies to this effect from health professionals.

“We must keep reason”

In a survey published in early August, the Samu-Urgences France association, which François Braun himself chaired just before joining the government, reported that multiple emergency services had closed for several days in July. This survey is part of a context of concerns among caregivers about the ability of hospitals to get through the summer, against a backdrop of a lack of beds and staff.

If the minister finally acknowledged the existence of closures, he nevertheless put their consequences into perspective. Among the 8 establishments closed, a figure also much lower than those reported by professionals, “there are 4 clinics with public emergency services nearby”, qualified François Braun. “You have to be right. »

The Minister also reiterated that all plots of French territory continued to have “vital emergencies” services, if necessary via mobile Samu teams.

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Shortage of drugs: authorities put pressure on manufacturers

For several years, many drugs have regularly deserted the shelves of French pharmacies. To overcome these stock shortages – far from being limited to the national territory -, public actors are always in search of the miracle cure.

The National Agency for the Safety of Medicines and Health Products (ANSM) announced on August 8 the strengthening of sanctions against manufacturers from 1er october. In the viewfinder: French pharmaceutical companies have not taken sufficient measures against the shortage of certain drugs. “The amount of the penalties applicable to these breaches has been increased,” the ANSM said in its press release.

20% of turnover

In the event of insufficient stock, manufacturers will be subject to a fine of 20% of the annual turnover generated by the treatment. Sanction to which may be added a second fine, daily this time, for the duration of the shortage.

The current legislation has already been strengthened several times in recent years. Since September 2021, manufacturers must secure the supply by building up stocks for two to four months for so-called “drugs of major therapeutic interest” (MITM), for which the interruption of treatment puts the patient at risk.

Multiple causes

“The shortage of stocks is not solely the fault of the French manufacturer, insists Philippe Besset, president of the Federation of French pharmaceutical unions. This concerns the entire manufacturing circuit. »

A multifactorial phenomenon, the shortage of medicines has various causes: “There may be shortages in the active ingredient, the increase in world demand, accidents in the factories themselves or even an overbidding between countries to capture medicines at the best price”, list Philippe Besset, for whom the tightening of the sanctions announced by the ANSM will not therefore solve everything.

A persistent shortage

In 2021, the ANSM received 2,160 reports of stockouts and risks of stockouts, i.e. more than five times more than in 2016 (405 reports). “Anti-infectives, drugs for the nervous system and anti-cancer drugs are particularly exposed,” underlines the ANSM.

The ANSM updates in real time on its website the list of unavailable drugs, such as Methotrexate used in the treatment of certain cancers or autoimmune diseases or in difficulty of supply, such as paracetamol.

How to face the rise of uncertainties?

Inflation, rising interest rates, Ukraine and now political uncertainty, the shocks are multiplying. To evolve in an increasingly complex environment, the editorial expertise of Les Echos is invaluable. Every day, our surveys, analyses, columns and editorials accompany our subscribers, help them understand the changes that are transforming our world and prepare them to make the best decisions.

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After its rebound in the second quarter, the French economy is stabilizing

After exceeding expectations in the second quarter, the French economy stabilized in July-August. This is shown by the Banque de France’s monthly business survey of 8,500 companies, unveiled on Tuesday. “In a still difficult economic environment (tensions on the raw materials markets, supply and recruitment difficulties), activity continues to resist”, underlines the monetary institute.

Driven by a strong upturn in market services – with in particular the dynamism of tourist activity – GDP growth was more dynamic than expected in the second quarter, recalls the Banque de France. This had finally reached 0.5% compared to the previous quarter according to figures published a few days ago by INSEE, while GDP had fallen by 0.2% during the first three months of the year. .

Vigor of human services

Going forward, the Banque de France expects GDP to stabilize in July and August, after the increases in May and June. “With the results we have today and the expectations based on the July acquis, we can count on a slightly positive growth rate” in the third quarter, indicated the Banque de France during a press briefing, according to the AFP.

In detail, the monetary institute is counting on a strong upturn in market services, in particular thanks to the strength of personal services. The balance of opinion on activity in this sector stands at +5 this month, down 3 points from June. In industry, production remained almost stable (-1), while activity contracted in construction (-3, down 6 points over one month), in structural work and in finishing work.

For the month of August, business leaders report more unfavorable prospects in industry and construction. Their forecasts are -7 and -13 respectively in these two sectors, down 6 and 10 points. On the other hand, activity should continue to grow in market services (+4). However, the Banque de France specifies that “these prospects remain shrouded in uncertainty”, particularly on the supply side.

Fallback in price increases

The second message from the monetary institute concerns prices: for the third consecutive month, the proportion of business leaders indicating that they were increasing their selling prices fell back in July, “in connection with tensions deemed to be less strong on the prices of raw materials raw materials,” explains the Banque de France. However, inflation remains at an unusually high level, particularly in market services and construction.

In industry, the rise in the prices of raw materials and finished products is slowing down again. Business leaders also report a slowdown in the rise in quote prices in the building sector (23, -6 points). In market services, on the other hand, they indicate a continued rise in prices (14, +1 point).

Moreover, order books remained full at a relatively stable level in July. In industry, the balance of opinion stands at +15, down 2 points compared to June and remains at +18 in building. With regard to the workforce, they continue to grow, with a particularly sustained pace in market services (5).


Drought: what are municipalities doing where drinking water is lacking?

A “historically” dry month of July, lack of rainfall and repeated heat waves: water stress in turn spread to France. More than a hundred municipalities are experiencing a shortage of drinking water, in the heart of the summer season.

Under the effect of climate change, the water crisis, an exhaustible although renewable resource, seems to be accelerating. In France, the alternatives to overcome the lack of drinking water are multiplying and coupled with new instructions aimed at limiting the consumption of blue gold. These restrictions range from watering the lawn to time spent in the shower. A delicate equation.

Fines and restrictions

Where springs dry up, measures to directly limit water consumption follow. Taps cut off at certain times in Arboys-en-Bugey in Ain, agricultural irrigation totally or partially prohibited in several departments (Val-d’Oise, Côte-d’Or, Maine-et-Loire, Charente-Maritime, etc.) , prohibited watering, water liter quotas… 93 departments are affected by water restrictions, on different scales.

Offenders risk a fine of 1,500 euros, 3,000 euros in the event of a repeat offense. This amount rises to 7,500 euros for professionals. The French Office for Biodiversity (OFB) monitors the use of water. In the Var, “tablets” dividing the water flow by six are installed in the event of non-compliance with quotas, according to “Le Monde”.

desalinate sea water

Several municipalities have equipped themselves with desalination units capable of transforming seawater into fresh, drinkable water. In Rogliano, in Haute-Corse, on the island of Groix as well as on Ile-Molène, these installations, often temporary, can produce thousands of liters of water per day.

However, this operation is not without environmental impact. In addition to high energy consumption, these factories discharge brine into the sea. This water, which is highly loaded with salt and dangerous for the marine ecosystem, is partly responsible for the rising temperatures in the oceans.

The viability of desalination plants is thus criticized. In mainland France, very few cities use them. They are mainly present in the Gulf countries, where drought is frequent.

Draw from the lakes

Some municipalities, deprived of access to the sea, have turned to another source of water: natural lakes. Gérardmer, a station in the Vosges, plans to supply 80% of its network by pumping the lake which has made it famous. Of glacial origin, the expanse of water stands out as the largest lake in the department. This solution, of last resort, had already been used during the heat wave of 2003.

Refueling by tank trucks

Rather than producing more, villages, especially those perched high up, are opting for water delivery to fill their reservoirs. Tanker trucks transport the resource in quantities, de facto, limited to the size of their tanks. Both costly and restrictive, this alternative places hamlets in a situation of dependence on these weekly deliveries.

Wastewater recycling

At a time when France is reusing less than 1% of its water, the exceptional drought has put projects to recycle gray water (lightly polluted domestic water) back on the table. In Vendée in particular, Sables-d’Olonne is busy transforming wastewater from a treatment plant into drinking water. This so-called “Jourdain project” initiative, unprecedented in Europe, is awaiting a first phase of tests by 2024.


Employment, training: spectacular increase in credits planned for 2023

If it is difficult to know if the objective of full employment by 2027 remains realistic given the ambient uncertainty, one thing is certain: the government is giving itself the means to achieve it. This is what emerges from the spending ceilings of the Finance Bill 2023 sent to Parliament on Monday, even if there is still a long way to go until the text is voted on. Alongside the sovereign and the ecological transition, training and employment constitute the third engine of the five-year term, confirms the Minister Delegate in charge of Public Accounts, Gabriel Attal to “Echos”.

In fact, with 30.7 billion euros in credits, three times more than in 2012, the Ministry of Labor is at this stage the third best endowed, tied with Research and Higher Education. Better, its budget gains 6.7 billion (6.2 billion if we exclude the increase in revenue from France skills) compared to the initial finance law of 2022.

From exceptional to structural

Even if the scope is not comparable, this change, the strongest of all the ministries, reflects a strong political decision: the change in nature – from exceptional to structural – of part of the effort deployed to mitigate the Covid crisis. In fact, the increase of 6.2 billion comes mainly from the maintenance of aid for the hiring of work-study students, hitherto included in the budget of the recovery plan, called to be financed by credits from the Ministry of Labour. There was one before the pandemic, but much more limited.

As a reminder, this aid is 5,000 euros for the recruitment of a minor under an apprenticeship or professionalization contract, 8,000 euros beyond the age of 18, regardless of the diploma pursued and the company’s workforce. Its amount has been calculated so that the operation is carried out at zero cost for the employer. Scheduled to end on June 30, it has been extended by six months and will therefore be extended next year, even if the award criteria will be reviewed.

Tighten but not too much

The Minister of Labor, Olivier Dussopt, and the Minister Delegate in charge of Vocational Education and Training, Carole Grandjean, will launch a consultation at the start of the school year with the social partners with the desire to tighten the system, we confirm from near Matignon. Tighten but not too much because Elisabeth Borne has set an ambitious goal: 1 million contracts signed in 2027, against 730,000 last year.

Employers are on the lookout, anxious to keep this boost as long as possible, despite the windfall effects specific to this type of measure. “If the government wants to reach 1 million apprentices, then aid must be maintained at its current level for at least next year, or even for two or three years, given the lack of economic visibility”, warns the vice- president in charge of social affairs of the CPME, Eric Chevée. “Necessary work to recalibrate aid will be undertaken, but support will remain massive,” promises Gabriel Attal.


Budget 2023: Bercy postpones the more painful measures

In presenting the arbitrations retained by the government, the Minister Delegate in charge of Public Accounts, Gabriel Attal, spoke of the Finance Bill (PLF) 2023 as the one opening “a phase of budgetary normalization”. In view of the budget documents sent to Parliament on Monday, this normalization will take place in measured steps: State expenditure should thus increase next year by nearly 15 billion in total compared to what was planned for this year, while the sources of savings remain mysterious for the moment.

The “reprint” published on Monday is the document setting the ceiling for the evolution of credits for each mission assumed by the State. What give a good trend of the intentions of the executive for the PLF which must be debated in Parliament from October.

Additional credits

As early as July, Bercy had warned – in the stability program sent to Brussels – that we should not expect a decline in the public deficit next year: this is expected at 5% of GDP, i.e. the same level than that expected for 2022. For the State and its agencies – one of the components of public administration, with Social Security and local authorities -, it is even a slight deterioration in the accounts which is anticipated, to -5.6 % of GDP against -5.5% this year. The real recovery for the central government balance (with a reflux still limited to -5%) is not actually expected before 2025.

Logically, the table present in the budget document sent to Parliament displays a long list of additional credits for the State. Certainly, Bercy can boast of displaying the ambition of a decline in volume (excluding inflation) of public spending next year by -1.8% compared to the amending budget which has just been voted last week. , with even a drop of -5.2% for the central administration. But these figures can be explained in particular because part of the aid to counter the effects of price increases is supposed to fade away.

On the other hand, if we compare the 2023 appropriations ministry by ministry compared to what the 2022 budget provided, then the “plus” column is well filled. An evolution assumed by Gabriel Attal, who judges that this should in particular make it possible to finance the “three priority ‘blocks’ corresponding to the three essential ‘drivers’ of the five-year term: training and employment, the sovereign pole and the ecological transition ” .

In fact, the Ministry of Ecology is endowed with an additional 1.9 billion (+7.6%) and Agriculture with 500 million (+15.6%). For the sovereign, Defense is entitled to the additional 3 billion that its programming law provided for – while the military feared cuts – and the Security mission will commit an additional 1.4 billion (+ 9.5%).

France 2030 planed

Even more spectacularly, the Labor budget jumped by 6.7 billion and now represents the third item of State expenditure. The 2023 financial year is also proving to be generous for National Education (+3.6 billion, i.e. +6.3%) while the programming law for research produces some effects (1.5 billion, i.e. an increase of 5 .1%). Finally, official development assistance also received a substantial boost (800 million, or +13.8%).

And the savings in all this? At this stage, it is still difficult to identify them. The gradual exit from the recovery plan will allow a lower expenditure of 8.6 billion next year. In addition, the France 2030 plan – yet announced with great fanfare last fall – will also be less well endowed in 2023, with 900 million less credits. A few weeks ago, the brand new Secretary General for Investment, Bruno Bonnell, displayed his fears of a planing stroke in relation to the 54 billion promised by 2030, judging that “this commitment, we will have to justify in light of the context”.

Finally, the State will freeze the level of its allocations to local authorities (at 41.1 billion), which amounts to saving money given the inflation that is pushing spending upwards.

The hunt for tax loopholes

For the rest, appointment is given at the start of the school year. At the beginning of July, the Minister of the Economy, Bruno Le Maire, announced that he wanted to involve parliamentarians in this search for savings with the creation of a “task force to thoroughly rethink public spending”, whose management has been entrusted to Renaissance MP Daniel Labaronne. In addition to the pension and unemployment insurance reforms, carried out by the executive and whose budgetary effects will be progressive, avenues should be explored with elected officials on housing, employment aid or even the elimination of niches taxes, especially climate-unfriendly ones.

Bruno Le Maire had already tackled tax loopholes, the last attempt in 2019 having proved to be poor in results. “Experience shows the difficulty of implementing their abolition”, had also noted a few days ago the High Council of Public Finances, in the very critical opinion delivered on the budget forecasts of the executive.


Unemployment insurance: the reform project supported by public opinion

As with its pension reform plan, the government knows it will face opposition from unions on unemployment insurance. With one downside, and size: if they are mainly opposed to the decline of the legal age, the French support the reverse and just as mainly the changes envisaged in the rules of compensation for Unédic. This is what emerges from the Elabe poll for “Les Echos”, “Classical Radio” and the Montaigne Institute.

Produced online between the 1er and August 3, this shows that 60% of French people say they are “in favor” of the changes envisaged. Specifically, 11% of them say they are “very”, 49% “rather”. As a reminder, it is a question of ensuring that the rules of compensation stick to the economic situation: more restrictive when the economic situation, therefore employment, is favorable and vice versa .

Improved picture

Support erodes (53%) when it comes to declining this modularity region by region, like what is done in Canada as pointed out by the Minister of Labor Olivier Dussopt, even if this perspective would come up against in France the constitutional principle of non breach of equality.

It is the voters of Emmanuel Macron, Eric Zemmour and the wealthiest households who are the most favorable to these reform projects. The electorate on the left and the most modest households are much more divided. Beyond the political divisions, the support undoubtedly originates in the improvement of the image that the French have of unemployment insurance, analyzes the president of Elabe, Bernard Sananès.

Credit to Emmanuel Macron

In four years, the proportion of those who believe that unemployment insurance works “well” has gained 12 points to reach 53%. Without confining to the plebiscite, the reversal is notable. It finds its source in part in the support of the Macron, right-wing and Le Pen electorate for the reforms of the previous five-year term and more probably in the current favorable climate of falling unemployment, according to the polling institute.

Associated with unemployment insurance, partial activity – an anti-dismissal weapon deployed with the Covid – has proven its worth. Last year’s tightening of compensation rules is seen as beneficial. Beneficial, but not sufficient: for nearly six out of ten French people, the main reason for the still high unemployment rate (it is 7.3% of the working population, down) is that they do not encourage return to employment. Insufficient wages are the second reason cited (42%).

“Finally, the French give credit to Emmanuel Macron for the favorable results of employment”, summarizes Bernard Sananès. Favorable, but not to the point of believing in the objective of full employment set by the Head of State by 2027. Only 24% of respondents consider it credible.


“On the budget, we will have the same method of compromise, and the same red lines”

Will the 2023 budget devote the return to budgetary normality, after texts on purchasing power which have again resulted in significant expenditure?

We are indeed going to begin, with the finance bill, a phase of budgetary normalization after whatever the cost linked to the Covid, the recovery plan and the anti-inflation shields. This phase should allow us to implement the presidential program for the five-year term, while meeting our objectives of gradually reducing the public deficit to return to 3% of GDP in 2027. This 2023 budget is the fuel that we are putting into the engine of the country to achieve full employment and protect the French.

How will this translate in terms of the evolution of expenditure?

Broad government spending will decline by 0.3% in volume terms next year. The off-print document that we are sending to Parliament on Monday reflects the arbitrations decided with the Prime Minister. It provides that State budget appropriations will amount to 339 billion euros in 2023, i.e. virtual stability in value compared to the level after the amending finance law, and a decrease of 2.5% in volume. This will make it possible to meet the objective of a deficit of 5% of GDP next year while financing our priorities.

What will be the main priorities next year?

There will be three priority “blocks”, corresponding to the three essential “drivers” of the five-year term: training and employment, the sovereign center and ecological transition. Credits for the first block concerning Education, Labor and Solidarity will increase by 12.5 billion euros, an unprecedented increase of 11.4%. The Employment budget will increase in particular by 6.7 billion, in particular to finance the rise of apprenticeship, with a target of 1 million apprentices by the end of the five-year term.

Will learning aids be further extended in 2023?

Necessary work to recalibrate aid will be undertaken, but support will remain massive.

Will a second Skills Investment Plan (SIP) be needed?

The Minister of Labor will speak on this point, but it is understood that the massive increase in the Employment budget will have to make it possible to continue financing training. All of this spending should contribute to consolidating our potential growth and achieving full employment. These are profitable investments for public finances.

What about National Education?

It will benefit from a historic increase (+3.6 billion) in its loans. The commitment of the President of the Republic on the continuation of the salary increase will be kept and no teacher will enter the career with less than 2,000 euros net. This is a first strong response to the issue of attractiveness of the teaching profession.

What credits for the “regular” block?

The budgets for Defence, Interior, Justice and Foreign Affairs will increase overall by 6.1 billion. A very significant increase that we assume in order to keep in particular the commitment of an increase of 3 billion of the credits of the Armies in 2023, but also the objectives of Beauvau of the security, which envisages the doubling of the presence of the forces of the order on the ground by 2030. The Justice budget will benefit from a further increase of 8%, after two years of increases of the same amounts, in order to continue recruiting new magistrates and to respect the plans for construction of new prison places.

What do you include in the environment block?

The Ministries of Environmental Transition, Territorial Cohesion and Agriculture will have an additional 3.3 billion euros. In particular, this involves accelerating the energy renovation of buildings and continuing to green the car fleet.

We have the impression that all the missions have priority… What will be the savings projects?

We act hard today so as not to have to suffer tomorrow. The president announced it: we will consult on reforms on pensions and unemployment insurance at the start of the school year, which will strengthen activity and contribute to the sustainability of our model. Each ministry is also committed to seeking savings within its scope. Ministers will have the opportunity to specify the reallocations of appropriations they undertake to better finance their priorities. In addition, we are reducing post-Covid recovery spending by 8 billion euros next year.

Should certain aids be targeted more?

Aid for the acquisition of clean vehicles will be geared more towards the most modest. Aid for thermal renovation should further support the overall renovation of “thermal sieves”. The expenses incurred must aim for the greatest efficiency.

How will the number of civil servants evolve in 2023?

The mandate sets a stability objective over the five-year period. This is an ambitious objective because we are immediately starting to strengthen the staff of the Ministry of Justice, the Interior and the Armed Forces.

Do we need more teaching posts to continue splitting classes?

We will complete the splitting of large section classes into priority education networks, as the president has promised.

Bercy will continue to lose staff…

We are still working on the employment plan. The Ministry of the Economy has been the main contributor to the decline in State staff in recent years thanks to modernization and digitization reforms, which will continue: a tax – the TV license fee – is first abolished, the unification of tax and social security collection will continue, as will the electronic invoicing project for businesses.

How will healthcare spending develop next year?

This will be debated as you know in PLFSS and not in PLF by parliamentarians. But I can confirm that health will be a priority and in particular the hospital. The stability program provides for a fall of 0.4% per year in volume of State expenditure over the five-year period, of 0.5% for local authorities but an increase of 0.6% above inflation for social security expenses. We will continue the massive investment in health with a high health insurance expenditure target (Ondam).

What efforts will be required of local authorities?

We obviously need them to continue to invest, and, with Christophe Béchu, we will meet the associations of elected officials at the start of the school year to define with them a spending trajectory over the five-year term, knowing that we are committed to stabilizing the allocations of the State, as during the previous five-year term.

Except that there is high inflation today, and therefore rising costs…

This also leads to a very strong increase in their income. Overall, local finances are in a very favorable situation, as the Court of Auditors points out. Their savings are 6% higher than in 2019, their cash has increased by 13 billion, and their revenues will increase this year, for example by around 8% for VAT. Of course, some are encountering difficulties, and we take this into account, as shown by the almost unanimous agreement found in Parliament providing for nearly 600 million in targeted aid.

Will the credits of the ministries arbitrated today be negotiable at the start of the school year? How will the new method that you promise apply with the oppositions?

These credit ceilings will be included in the finance bill, the documents of which are being prepared this summer for Parliament, but obviously, we will work upstream with the national representation, including with elected officials who are not in the majority. , as on the PLFR. The 2023 finance bill that we will present with Bruno Le Maire to Parliament in the fall will not be take-it-or-leave-it. We will have the same method of compromise, but we will also have the same red lines: no debt, no taxes.

Job creations are higher than expected, the results of large companies are at their highest: are you hoping for other tax and social capital gains?

The information I have for June and July reflects strong dynamism in receipts, which is good news consistent with the rebound in growth observed. The latest Urssaf data are also very positive: the number of hires is still up 2.9% in the second quarter, and 9.6% over one year for industry. Thanks to this, the payroll increased by 11% over one year. This is a decisive element for the financing of social protection, and it demonstrates that support for business competitiveness, training and employment bears fruit.


Debt, interest rates: the Bercy scenario for the five-year term

The figure surprised and worried: by announcing within the framework of the rectified draft budget that the debt burden for the State was going to jump by 17 billion euros this year compared to the initial forecast, the Ministry of Finance made send the message that the era of free money was well and truly over. In six months, the ten-year interest rates paid by France to finance its debt have climbed: still zero at the end of 2021, they exceeded 2% in June before falling back since around 1.3%.

However, most of the additional bill in 2022 is not (yet) linked to this rate hike, the effect of which will only spread gradually. It is the peak of inflation which explains it to a very large extent, part of the State bonds being indexed on the evolution of prices in France and in the euro zone.

The welcome ebb of inflation

For 2023 and the rest of the quinquennium, the executive has not yet disclosed specific forecasts. But the stability programme, the budgetary roadmap which is the subject of a debate in the National Assembly on Tuesday (before the Senate on Wednesday), gives interesting elements on the growing cost to come of a debt which represents today nearly 112% of GDP.

Next year, Bercy paradoxically anticipates a decline in the overall interest charge, to 1.6% of GDP against 1.8% this year. The expected decrease in inflation in France (+3.2% expected next year, after +5% this year) and in the euro zone would in fact make it possible to significantly reduce the bill for indexed securities. A pendulum effect with the movement observed this year which should more than offset the growing impact of the rise in interest rates: in its macroeconomic scenario, the Ministry of Finance is counting on ten-year rates for the French debt at 2 .6% at the end of 2023 (i.e. twice today).

France on a crest line

But then, this interest charge would increase throughout the five-year period under the double effect of the rise in rates which would continue (Bercy puts forward the hypothesis of a regular continuation of the rise in rates, up to 3% in 2027) and the refinancing of bonds issued at a time when interest rates were still negative. Knowing that the average maturity of French debt securities is around eight years.

The overall public debt interest burden would thus rise to 2.1% of GDP in 2027, indicates the stability programme, against 1.4% (at its lowest) in 2021. A significant impact therefore, which will reduce budgetary leeway for other public policies.

But an impact that would remain relatively contained as a proportion of GDP, thanks to a robust growth forecast, moderate inflation and a return of the deficit to below 3% at the end of the five-year term. With a public debt close to 112% of GDP throughout the legislature, according to figures from the executive, France will however remain vulnerable in the event of a strong shock on the financial markets.