Budget 2023: Bercy maintains the course on the deficit, despite amendments costing 700 million

Posted Oct 19, 2022 6:15 PMUpdated on Oct 19, 2022 at 7:34 PM

For now, it holds. The government continues to aim for a stable public deficit next year, at 5% of GDP. And yet the major balances of the finance bill (PLF) for 2023 emerge significantly different from the parliamentary examination concluded this Wednesday by the adoption without a vote at 49.3, with new amendments costing around 700 million euros.

It has been a week, and nearly 50 hours in total, that the deputies have been debating the first part of this 2023 budget, devoted to revenue alone. Hectic, sometimes chaotic sessions, which resulted in the adoption of 72 amendments in the end, even though the deputies did not manage to pass the fourth article of a part which contains 26 of them. These changes alone – most of the time voted against the advice of the government – would have heavily increased the deficit, by 8 billion, according to calculations by Bercy.

The government is sorting out

An unacceptable scenario for Bruno Le Maire, who has been warning for a few days against “funding conditions in Europe which have changed radically”. The Minister of the Economy highlighted the fact that “for the first time in many years, German Treasury bonds did not find full takers” during a recent debt issue.

The government has therefore sorted out, rejecting a large part of the amendments deemed too costly. He also added to the PLF certain provisions related to articles that did not have time to be discussed. In total, this therefore makes 117 amendments retained, the total cost of which is estimated at around 700 million by Bercy.

The most generous amounts go to tax boosts for SMEs (170 million) and the care of young children (200 million), or even the raising of the ceiling for meal tickets (140 million). The bill is much higher still for the safety net put in place to help local authorities in the face of the energy crisis (1.5 billion), but this does not affect the public deficit, being considered as a simple transfer from the State to the communities.

Provisional deficit

In total, these 700 million only move the public deficit marginally. Paradoxically, it even shows a temporary decline, to 4.7% of GDP, at the end of this first stage. Among the amendments finally added by the executive, is the establishment of the contribution of the energy companies wanted by the European Union, which amounts to taking all the profits from them for electricity sold above 180 euros per megawatt hour. This tax on the superprofits which does not say its name will bring back 7 billion, which is added to the 20 billion already taken from the producers of renewable energy.

“The 7 billion proceeds from this tax will be recycled for aid schemes in the face of the energy crisis”, we warn at Bercy. The executive is indeed preparing new aid for businesses, which would go beyond the counters already set up with relative success so far. These will be integrated into the second part of the PLF, devoted to expenditure, which remains to be examined.

The budget is substantial, but the needs are even greater, with heated debates within the executive between those who want to guarantee lower energy prices for companies (like Germany) and those who are worried about the bill. The deficit target remains firmly fixed at 5% of GDP for the time being.

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