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France to face 'austerity budget' for 2024

The Local France
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France to face 'austerity budget' for 2024
France's finance minister Bruno Le Maire is preparing the 2024 budget. Photo by JULIEN DE ROSA / AFP

After three years of generous state aid during first the Covid pandemic and then the cost-of-living crisis, France will face an 'austerity budget' for 2024, the finance minister has announced.

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Finance minister Bruno Le Maire on Friday told French media that he was preparing a budget that contained €16 billion of savings.

It marks an end to the era known as 'quoi qu'il en coûte' (whatever it costs) when the French government provided generous financial aid to businesses and households through the pandemic, and then brought in a series of measures including electricity and gas price freezes to protect households from the rise in the cost of living linked to Russia's invasion of Ukraine. 

Le Maire did not provide details of where the savings in his budget will come from, but the government has already ruled out tax hikes for households. 

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It is likely that at least some will come from the reform of unemployment benefits which has been gradually phased in over the past three years, and the scrapping of certain financial aid programmes still in place for businesses.

The latest budget forecasts predict that the French economy will continue to grow next year, but forecasts have been downgraded from a 1.6 percent growth to 1.4 percent. The French government is under pressure to balance the books and rein in national debt after the country narrowly escaped having its credit rating downgraded by S&P Global over the summer. 

Le Maire will present his 2024 budget to parliament on September 27th - although the Macron government does not have an overall majority in parliament, the constitutional tool known as Article 49.3 can be used an unlimited number of times to push through financial bills such as the budget without a vote.  

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