SHARE
COPY LINK

FINANCE

Five ways France throws money down the drain

France's top auditors, the Cour des Comptes, said in their annual "how to save money" report on Wednesday that there are numerous ways France can save and make money. Here are five.

Five ways France throws money down the drain
Photo: AFP
France's top state auditor released a 1,336-page report on Wednesday that looked into examples and risks of wasteful government spending.
 
And France is going to have to pay attention, not least considering reducing its deficit to 3.3 percent of GDP this year, and below three percent next year.
 
Here are a few of the report's recommendations on how France can reduce the most egregious examples of government waste.
 
No post on Saturdays
 
The auditors noted that France wasn't adjusting to people's decreasing dependence on old-fashioned snail mail. Postal workers may be “under occupied” because of this, and what's more, they're allowed to clock off when they've finished their round, meaning it's almost impossible to know how much potential working time is being lost. 
 
The body also wondered if it's really necessary to have mail delivered on Saturday, and whether a switch to only weekdays was due. And with improving technology, the auditors noted that sorting mail could be increasingly handed over to machines. 
 
The Nuclear cost of power plants
 
Photo: AFP
 
Maintaining France's nuclear plants will cost an estimated €100 billion by 2030, which works out as €1.7 billion per reactor. 
 
While this should create around 110,000 jobs by 2020, there is a risk that many of the plants will actually be closed down. A recent law change requiring France to cut down on nuclear energy production from 75 percent now to 50 percent in 2025 means that up to 20 of France's 58 nuclear reactors may close before 2025.
 
Rail improvements
 
While there have been investments in national rail service SNCF – particularly with improving the high-speed fleet, there are other issues that need addressing, said the Cour de Comptes. 
 
The report noted that around 15 percent of the country's overhead wires were over 90 years old.
 
It also noted that the service was “antiquated” and could do with general improvements – pointing out that a daily commuter using the RER A and RER B lines in Paris would “hardly go one week” without being hit by delays. 
 
Paris Metro too cheap
 
A monthly Navigo pass in Paris sets a traveller back €70 – which is hardly pricey enough, said the auditors. 
 
It said the price was “one of the lowest compared to major foreign cities that are comparable to Paris”.
 
No to fare-jumpers
 
Photo: Nicolas Nova/Flickr
 
People not paying for tickets in the Ile-de-France region, which includes Paris, costs France €366 million a year. And it could be higher, the report said. 
 
The figures are astounding – 123 million cases of people travelling without the proper bus ticket, 23 million on the trams, 84 million on the Metro, and 14 million on the RER. 
 
The body called for a strengthening of controls, and also asked very politely for citizens to “remember their individual responsibility as a member of the national community”. 
 
Other measures
 
Other way France could save money included a suggestion to increase cigarette prices, to cut the wages of the military, and to make cutbacks at five major national theatres across the country.
 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

MONEY

Reader Question: Why did my French electricity bill increase by more than 4%?

The French government has capped electricity prices rises at four percent - but as with many French rules, there are certain exceptions.

Reader Question: Why did my French electricity bill increase by more than 4%?

Question: I read in the media that electricity prices in France are capped at four percent, but I just got a letter from EDF telling me that my bill is going up by almost 20 percent – is this a mistake?

The French government’s bouclier tarifaire (tariff shield), froze gas prices at 2021 levels and capped electricity price hikes to four percent – it remain in place until at least the end of 2022.

However, there are some customers who will see increases to their bills of more than that – here’s why: 

The regulated tariff rate

The French government involvement in price-setting doesn’t just happen during periods of energy crisis, normally regulated tariff prices are updated twice a year: usually on February 1st and August 1st.

Typically, this value is calculated by the CRE (commission de régulation de l’énergie) and it is based on several different factors, which are explained on this government website. These tariffs proposed by the CRE are then subject to approval by the ministers in charge of energy and the economy.

READ MORE: EXPLAINED: Why are French energy prices capped?

These affect the state-owned Engie (formerly Gaz de France), the mostly state-owned EDF and some local distribution companies. Around 70 percent of people in France get their electricity from EDF but other suppliers do exist in the market.

These alternative suppliers, like Direct-Énergie, Total Spring or Antargaz, are free to charge more – but don’t usually charge much above the EDF rates for obvious commercial reasons.

Basic rate

The government-set limit in price rises refers only to the basic rate (option base) for electricity.

This plan represents over 80 percent of the 32 million households connected to the electricity grid in France. So, there is a good chance you might be subscribed to this without even realising it. 

If you are on the basic tariff rate, your bill will not increase by more than four percent this year.

Other tariff options

However, other options for electricity bills do exist, including off-peak rates, green deals and fixed energy prices for a certain period.

Typically people who sign up for these will have been paying less for their electricity in the preceding months than those on the base rate.

However, there are certain special deals that are not covered by the four percent cap, and some users will find that their deal period has come to an end, they are then shifted onto the base rate – which is likely to represent a price increase for them of more than four percent.

It’s little consolation when faced with rising bills, but you will likely have been paying significantly less than customers who have been in the base rate for the past few years.

READ MORE: French government to continue energy price freeze until at least 2023

Kilowatt price

Because most electricity price plans are bafflingly complicated, the easiest way to compare is to look at the price per kilowatt-hour.

Your electricity bill consists of a fixed part, the monthly subscription (abonnement) and the variable part, which depends on the quantity of electricity consumed (in euro per kilowatt-hour, kWh). The latter part is what is concerned by the tariff shield of four percent.

Here is an example of what that might look like:

The mid-August base rate price per kilowatt-hour is €0.1740/ kWh, so if you’re with EDF they cannot charge you more than this rate.

Other EDF plans charge significantly less than that – for example the Vert Electrique Weekend deal has been charging €0.1080/kWh on weekends and €0.1434/kWh on weekdays. 

Bill rises

With the tariff shield, the average resident customer on the base rate will see a €38 rise on their bill this year, while professional customers will see an average of €60 rise. 

Without the tariff shield, electricity prices per residential (non-business) customer would likely have increased an average of €330 a year, according to the CRE.

SHOW COMMENTS