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ECONOMY

Explained: How is France keeping its inflation rate comparatively low?

All around the world spiralling inflation rates mean that households are facing rapidly rising bills. Although France has certainly not been spared it is faring better than many of its neighbours - here's why.

Explained: How is France keeping its inflation rate comparatively low?
Photo by FRED TANNEAU / AFP

The map below shows the comparison between France and its EU neighbours.

In the eurozone area, the annual inflation rate was ranked at approximately 7.5 percent.

Meanwhile, Eurostat estimates that France’s inflation is at about 5.4 percent – lower than the eurozone average, and considerably below the  countries such as Estonia (19 percent), the Netherlands (11.2 percent), Spain (8 percent), and Germany (7.8 percent).

Meanwhile in the UK inflation stands at 9 percent, and in the US at 8.3 percent.

So what accounts for the difference?

The major difference is France’s use of nuclear power, which accounts for about 70 percent of the country’s electricity production and 40 percent of its overall energy consumption.

This makes it less vulnerable to shocks arouns gas prices, which have soared against the backdrop of the war in Ukraine. 

On top of France’s use of nuclear energy, the country has also seen several measures taken by the government to attempt to limit rising inflation – particularly linked to household purchasing power.

The most impactful have been the tariff shield which freezes prices of electricity and household gas for consumers, as well as an 18c per litre fuel rebate to help drivers. 

The economics think-tank, Astères, did a study to determine the impact of measures on limiting inflation, and they found, using data from April and earlier, that the total inflation would have been 1.6 points higher without these two measures. 

Additionally, France has seen a measured increase in wages – approximately 2.5 percent, to be specific.

So what is France planning to continue keeping its inflation comparatively low?

Food grants

Prime Minister Elisabeth Borne announced that a chèque alimentaire (food cheque) will be available to low income households in September. The proposal is for the money – amount as yet unspecified – to be paid directly into people’s bank accounts. 

READ MORE: French PM announces aid cheques for people struggling with price hikes

An extension of the fuel discount

Macron’s government is seeking to extend the 18c per litre fuel discount until at least the end of August. 

An extension of the tariff shield

The cap on electricity and gas prices will last until at least the end of 2022, and possibly into 2023.

A revaluation of pensions, salaries, and benefits

Retirement pensions will be indexed to inflation starting with the July pension, which is paid on August 9th. It is worth noting that this indexation concerns basic pensions – not supplementary plans. The Prime Minister announced that the increase would be about 4 percent, which is close to France’s current inflation rate. 

Unemployment and disability benefits will also be increased, though the specific amount has not yet been announced. 

An increased ceiling on the “Macron bonus”

The ‘Macron bonus,’ which allows companies to offer tax-free bonuses to their employees, will have its ceiling raised to up to €3,000. This is optional for companies, however.

Taxes to not rise with inflation

The Minister of the Economy, Bruno Le Maire, said that he wanted to “remove the concern” that the French might end up paying more taxes because of inflation, adding to BFMTV that it is “out of the question that French employees would pay more taxes because of inflation.”

Getting rid of the TV licence

The TV licence will be abolished in the autumn, with a saving for households of €138, that is to say a loss of revenue for the State of more than €3 billion.

Other possible measures

The Prime Minister said she is asking her government to consider extending the €1 meal ticket for university students in school canteens, as well as consulting ways to adapt the current method of calculating future increases in rent, which are currently indexed to inflation. A total freeze seems to have been ruled out, however.

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ANIMAL WELFARE

How to adopt a pet from a French animal shelter

Around 300,000 pets are abandoned every year in France, many of them during the summer months. So if you're looking for a pet there are many lovely cats and dogs in shelters looking for a good home - here's how to go about it.

How to adopt a pet from a French animal shelter

Where to look

French animal welfare charity the Société Protectrice des Animaux (SPA) is an excellent place to start – it currently lists nearly 4,500 animals available for adoption. 

But there are lots of other smaller, local organisations – it may be worthwhile dropping in to see a local vet as they will generally know of local groups seeking homes for abandoned pets.

There will be paperwork

First-time buyers of cats or dogs have to sign a ‘certificate of commitment and understanding’ before they will be allowed to buy an animal, and the same applies to those looking to adopt. 

After the signed document is delivered to the authorities, future owners have seven days to change their mind – the idea is to prevent people from ‘impulsively’ buying or adopting pets only to abandon them later. 

The SPA, certainly, demands that would-be adopters are of legal age and are willing to take part in a “responsible adoption process”.

These things take time – as you should expect for a commitment that can last more than a decade. As the SPA website says, it seeks to ensure “that each decision is carefully considered and that the adopted animal matches its new family and way of life”.

The process may include home visits, interviews and discussions to help adopters find the animal to which they are best suited – older people may not cope well with an energetic puppy, for example.

READ ALSO What you need to know about owning a dog in France

Shelter animals

Some welfare organisations ensure their animals spend some time with ‘foster families’ until they are adopted. This means that the organisation has a pretty good idea how that animal is likely to behave when it gets to its new adopted home.

It is more difficult to judge an animal’s character if it has been kept in a pen in a shelter.

It will cost money

A financial contribution will most likely be requested by the organisation from which you are adopting. The sum will depend on the age and type of animal being adopted. 

The SPA, for example, asks for a donation to cover vets’ fees of between €250 and €300 for a dog, depending on its age, and €150 for a cat or a kitten.

Another well-known animal welfare organisation in France, Les Amis des Animaux, has a slightly different scale of fees covering the cost of chipping, vaccinations – including rabies/passport in mature animals, sterilisation, worming, et cetera. 

READ ALSO What you need to know about microchipping your pet in France

What else you need to know

Under French law, pet dogs – and cats and ferrets – over a certain age must be identified and registered on a national database. 

The animal must be identifiable by a tattoo or microchip – the latter is the most common method these days – that is registered on the Identification des carnivores domestiques (I-CAD) database

The procedure to insert the microchip, or ink the tattoo, must be carried out by an approved professional. The procedure should be done by a vet and costs between €40 and €70, the shelter will tell you whether your new pet already has a microchip or not.

You might not believe it if you have walked along certain streets in Paris, but you can be fined if you fail to pick up after your pet. 

The standard fine is €68, but the mayors of some towns have imposed stricter rules in the street, in parks, gardens and other public spaces. 

The French government’s Service Public website lists other rules regarding the health and wellbeing of pets. Read it here.

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