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ENERGY

France to limit price hikes on gas and electricity

As energy prices soar across Europe, the French government has announced a raft of measures to protect consumers.

France to limit price hikes on gas and electricity
(Photo by Thomas COEX / AFP)

The French Prime Minister, Jean Castex, has promised a “price shield” for household gas and electricity consumers.

His announcement came during a television interview on TF1 on Thursday, with less than a year to go until the Presidential election. 

Gas prices are set to rise by 12.6 percent this month, following a 7.9 percent rise in September, but will then remain frozen until April 2022. Only 1 percent of gas consumed in France is produced in the country. Global demand for gas typically rises during winter periods – the French government is trying to ensure that consumers won’t suffer. 

To compensate the winter shortfall, gas companies are likely to charge consumers higher that normal rates once the freeze is lifted. 

“We have to manage a spike [in price],” said the Prime Minister. Experts predicted that the price of imported gas could rise by 30 percent by the end of the year without intervention. 

This strategy has been attacked on the French left, most succinctly by Fabien Roussel of the French Communist Party. 

“The prices will be blocked… after a hike of 12 percent on gas. What a scam!!!”, he tweeted. 

Those on the right have accused Castex and the government of fiscal irresponsibility in recent weeks, evoking an ‘open bar budget’ and ‘burning of the cash register’. Many, including the Senate leader of Les Republicains, Bruno Retailleau, described the energy plan as cynical electioneering.

READ ALSO Rising energy prices: How to save money on bills in France

“The government proposes a price shield on gas up until April. That’s to say just up until the presidentials. The price hikes will come later!” he wrote. 

The government is only able to freeze prices of gas for households subscribed to Engie – one of France’s oldest energy suppliers in which the state holds a majority stake. It is expected that other gas companies (which account for about ⅔ of French households) will fall in line, in order to stay competitive. 

The Prime Minister also announced that the next electricity price hike, planned for February 2022, would be limited to 4 percent after it had initially been forecast for three times as much. Since Emmanuel Macron was elected as President in 2017, electricity prices have doubled. 

The government had previously announced that six million of the poorest households in France would receive extra energy subsidies of €100 in December. The so-called chèques énergies (energy cheques) were initially put in place during the yellow vest protests as a way to quell discontent. 

A recent poll published by Opinionway predicts a second round victory for President Macron in next year’s election. But the first round could be tight, with the 43-year-old winning less than 30 percent of the vote. This being the case, the government has left room for maneuver on energy policy. 

“If the measures we take are not enough, we will strengthen them,” Castex promised.

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MONEY

The best banks for non-EU citizens living in France

Many foreigners in France - particularly pensioners - need to keep a bank account in their home country, but not all banks will offer accounts to people living abroad.

The best banks for non-EU citizens living in France

Most people who move to France get a French bank account – but many also maintain accounts with banks in their home countries to receive income in the form of pensions, property rentals, salary, or to hold savings and pay bills.

This is particularly key for pensioners, as some pension providers will not pay into a bank account in another country, but others just prefer the convenience of having a bank account and debit card to use on visits home in order to avoid extra transaction fees.

Banks within the EU benefit from ‘passporting’ arrangements that allow them to operate throughout the Bloc, but for those outside the EU it’s a little more complicated.

Here are the options.

International accounts

Many banks offer ‘international accounts’ aimed at those who have moved to other countries.

The major drawback is the cost; many accounts have a minimum deposit level or stipulate a minimum annual income, so they may not be suitable for pensioners, people on a low income, or those who just want to use their account for a few basic functions while keeping most of their income/assets in their French account.

Most expat/international accounts also charge a monthly fee and some charge transfer fees on top of that. 

They’re really aimed at ‘high net worth’ customers (ie rich) so they’re often not suitable for people who have lower means or have retired to France.

Internet banks 

The last few years has seen a proliferation of new internet banks, which offer online-only services and operate across Europe.

The advantage of these is that you can sign up with a French address and then carry out transactions in another country.

Many people use internet bank accounts – Wise (formerly the money-transfer service Transferwise, now set up as a bank), Revolut or Starling are notable examples – when they first move to France before they set up French accounts.

The disadvantage for some people is their lack of a physical presence so in case of a question or a problem contact can only be made by phone or – more usually – via email or chatbot. Many internet banks also do not issue cheque books or accept queues, which can be a problem for some customers.

Customers can set up accounts in different currencies and depending on the bank and its licencing you may also be account to get an account number and IBAN for your home country as well as a European IBAN.

READ ALSO The best UK banks for Brits in France

It means you can use the account for business back home, but also transfer money quickly and easily to/from France. It might give a better deal on exchange rates than receiving a pension in one currency and then spending in euros in France.

There’s a tendency to assume that internet-only banks are less secure, which isn’t necessarily the case, but if there are problems it can be harder to get redress. Make sure the bank you are using has a banking licence in your home country and France for peace of mind.

French banks

Most people living in France already have a French account for daily life, but can you use this for all your financial affairs?

It depends on your situation. Pension providers may only pay into a home account, while if you still have financial liabilities in another country, such as a mortgage, you may need to keep an account in that country. 

Keeping a home address

Many non-EU residents in France get around the problem by using a ‘care of’ address back home in order to retain their bank account – usually either the address of a property that they own or the home of a relative.

Whether this is allowed is a bit of a grey area. Opening a new account may be difficult, but existing accounts may be kept open. Some banks – especially British ones – seem to be keen on checking whether their customers are permanent residents while others don’t seem to care as much.

Basically you can’t lie to your bank if they ask you outright where your full-time residence or tax residence is, but not all banks ask this. 

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