Facing mounting pressure from the European Union to bring down its deficit, France’s conservative minority government announced on Sunday, October 27, new austerity measures aimed at public sector absenteeism, higher taxes, and sweeping spending cuts. The government’s strategy to save billions of euros in its 2024 budget has stirred intense political opposition, with parties on both the left and right criticizing the approach.
In an interview with Le Figaro, Public Administration Minister Guillaume Kasbarian stated that reducing absenteeism among public sector employees is a key component of the government’s cost-saving measures. With a steep increase in public sector sick leave — from 43 million days in 2014 to 77 million days in 2022 — the government sees absenteeism as an area where significant savings can be made.
The Finance Ministry estimates that tightening regulations around sick leave could save the state approximately €1.2 billion annually. Specifically, the proposal would delay payment to state workers on sick leave until the fourth day, rather than the current one-day policy, potentially discouraging short-term sick leave. Maternity leave, work-related injuries, and serious, certified illnesses will be exempt from these changes.
“We must have the courage to take difficult decisions today to avoid more difficult choices in the future,” Kasbarian explained, underscoring the need to act swiftly in light of France’s swelling deficit.
Finance Minister Antoine Armand confirmed on Sunday that France’s deficit for 2024 is projected to reach between 6.1% and 6.2% of GDP, exceeding the EU’s recommended cap of 3% by more than double. As France faces this budgetary challenge, Armand laid out the government’s strategy to reduce the deficit to 5% by 2025, proposing an ambitious plan to raise €60 billion through both increased taxes and spending cuts.
The plan seeks €20 billion from tax hikes and €40 billion from reduced spending across several sectors, including development aid, environmental initiatives, and culture. Among the proposed cuts:
- Development Aid: Reduced by €640 million, with implications for France’s commitments to international assistance.
- Clean Vehicles Initiative: A reduction of €300 million from programs aimed at promoting environmentally friendly transportation.
- Cultural Spending: A €55 million cut from France’s cultural programs, which could impact everything from national museums to local arts initiatives.
These cuts are part of an extensive austerity package designed to balance the government’s budget, but they have sparked discontent within parliament, where debates over pensions, corporate fees, and social benefits continue to intensify.
The government’s plan to delay pension increases by six months has drawn criticism, particularly from lawmakers who believe it targets vulnerable retirees. This measure, coupled with a proposed increase in statutory fees paid by companies, is projected to raise an additional €4 billion. The delay in pension adjustments could disproportionately affect low-income retirees who rely on consistent pension income to manage living expenses amid rising inflation.
Left-wing lawmakers argue that raising statutory fees on businesses and delaying pension increases shifts the burden of deficit reduction onto the working class and elderly, which they see as an unfair approach. Right-leaning opposition members have voiced similar concerns, albeit for different reasons, arguing that the delay in pension adjustments could undermine future trust in the pension system.
The National Rally (RN), France’s largest single party in parliament, has emerged as one of the most vocal opponents of the proposed budget. RN Vice President Sebastien Chenu criticized the government’s actions, specifically targeting the pension delay and other austerity measures. He warned that if the conservative minority continues on its current course, it could face a motion of censure from parliament, potentially forcing the government to resign.
“We warn the government … you are creating the conditions for your censure,” Chenu declared on Sunday, signaling the RN’s readiness to take action against the budget plan. If the RN unites with left-wing parties in a confidence vote, they could bring down the government, a threat that underscores the high political stakes of France’s budget debate.
Left-wing parties, meanwhile, have pushed through a vote to make a tax on the wealthy permanent, arguing that France’s wealthiest citizens should contribute more to addressing the national deficit. The measure, initially intended to last only three years, will now remain indefinitely, signaling a shift in the country’s approach to wealth taxation.
In addition to the wealth tax, left-wing lawmakers have called for new levies on multinational corporations operating in France and high-value financial transactions. They argue that these entities, which often benefit from France’s infrastructure and workforce, should be subject to additional taxes to help offset the budget deficit and alleviate the need for spending cuts in social programs.
France’s conservative government finds itself navigating a complex landscape. The European Union has made it clear that France must make significant strides to curb its deficit, pressuring the government to take a more aggressive stance on budget reform. At the same time, domestic opposition from both the RN and left-wing factions threatens to derail the proposed budget if key grievances aren’t addressed.
The EU’s pressure stems from a broader initiative to stabilize the Eurozone by enforcing fiscal responsibility among its member states. France, as the Eurozone’s second-largest economy, plays a crucial role in maintaining the stability of the euro. With France’s debt levels ballooning, the EU has grown increasingly concerned about the long-term impact on the union’s financial health.
However, the government’s austerity approach has polarized public opinion. Supporters argue that controlling public spending is essential to prevent further debt accumulation, while opponents claim that such measures unfairly target the working class, public employees, and the elderly. France’s labor unions, which have historically played a powerful role in mobilizing public opposition to government policies, are already preparing to stage protests against the proposed cuts.
The government’s austerity measures risk sparking social unrest, particularly in light of recent history. France has a strong tradition of public demonstrations, and government measures perceived as unfair or burdensome often face swift backlash. Labor unions representing public sector workers, already critical of proposed sick leave changes, are preparing to challenge what they consider an attack on workers’ rights.
For public sector employees, the delayed payment for sick leave could create additional financial strain, potentially leading to further dissatisfaction among state workers. Teachers, healthcare providers, and municipal employees, who comprise a substantial portion of the public workforce, are likely to feel the brunt of these changes. The government has assured that certain categories of leave, such as maternity or work-related injuries, will remain unaffected, but unions argue that even selective cuts undermine workers’ rights.
Additionally, cuts to development aid and environmental initiatives are expected to have far-reaching implications. France has long been a significant player in international development, and a reduction in aid could weaken its influence in the global arena. Environmental groups, meanwhile, warn that reducing funding for clean transportation initiatives could hinder France’s progress in meeting its climate goals.
The budget debate serves as a critical test for France’s conservative government, led by Prime Minister Élisabeth Borne. As a minority government, Borne’s administration already faces a challenging parliamentary landscape, where passing controversial legislation often requires negotiation and compromise. If left-leaning parties and the RN join forces to oppose the budget, the government could be pushed to the brink, potentially triggering a confidence vote that would determine its fate.
While EU requirements provide a framework for fiscal discipline, the government must balance these demands with the reality of public opinion and parliamentary dynamics. With a minority in parliament, every budget decision has the potential to catalyze opposition and jeopardize the government’s stability.
