What France is doing and plans to do, with economy

https://pressreader.com/article/282127820349159
Sorry link not gone direct to Guardian article, I’ll see if I can copy it
France earmarks €45bn to fund cap on energy price increases

• The Guardian
• 27 Sep 2022
• Kim Willsher Paris

The French government plans to spend €45bn shielding households and businesses from energy price shocks in a budget focused on bringing down inflation.

The finance minister, Bruno Le Maire, said the rise in the cost of gas and electricity would be capped at 15% from January. Gas and electricity price rises are capped at 4% until the end of the year in what is known as the bouclier tarifaire (tariff shield).

Outlining key elements of his 2023 budget bill yesterday, Le Maire insisted it was financed “down to the last euro” and the government’s No 1 priority was fighting inflation at a time of unprecedented uncertainty due to Russia’s war against Ukraine.

“The most important and the most urgent challenge for France and other European nations is to bring down the inflation pressure,” the minister told journalists yesterday. “We don’t want to increase taxes and we want to protect households.”

Le Maire said special levies on energy companies were expected to reduce the net cost of the price cap from €45bn to €12bn. He said €3bn would be set aside to help companies threatened by soaring energy prices, particularly those “exposed to international competition”.

The French state is the majority shareholder in EDF, the country’s largest electricity supplier – it is currently engaged in taking full control of the company – and has a majority shareholding in Engie (formerly Gaz de France), owning about a quarter of the stock in 2019.

In an interview with Le Journal du Dimanche, the Public Accounts minister, Gabriel Attal, said the fuel price cap would “block the rise in gas and electricity bills at 15% instead of 120%”. Without this year’s 4% price cap, based on prices in November 2021 three months before Russia’s invasion of Ukraine, the ministry estimated French bills would have risen 60% for gas and 45% for electricity.

“The budget we are presenting is a budget to protect,” Attal said.

Income tax bands are also being increased next year by 5% to partially mitigate the effects of inflation, meaning someone earning €2,000 a month would be €200 better off, Attal added. The top tax bracket for anyone earning over €169,000 will remain at 45%.

Le Maire also announced pay increases for teachers, as well as 10,000 new civil service jobs, including 2,000 new teachers, and the financing of 6,000 homes for refugees and asylum seekers.

He said inflation was expected to remain at around 6% in the coming months before dropping to 4% in 2023. The government’s second priority is to maintain public spending to within 5% of the country’s output, with the aim of reducing it to the European Union’s limit of 3% of GDP by 2027, and to reduce the public debt, expected to rise to a record €270bn next year, from 2026.

Economic forecasts earlier this month suggest the growth of France’s economy will drop to 1% next year from 2.7% this year. However, the Haut Conseil des Finances Publiques , an independent body, has said the government’s growth forecasts were optimistic.

The government must now push the budget through a fractious parliament, having lost its majority in the Assemblée Nationale in legislative elections in June.

‘The most important and urgent challenge is to bring down the inflation pressure’

Bruno Le Maire French finance minister

 

It’s easier to do when there’s no profiteering in their energy market to the extreme we are seeing.

Who would have thought privatisation of the key fundamental services that humans should have is a better system?

And that’s from somebody who got paid incredibly well by one of the big six energy companies. Tbf I was at probably the most customer orientated one of that group, but in generation they make absolute benjamins.