Government withdraws €3.1 billion in funds designated for environmental protection, economic development, and academic research and higher education.
Fresh Take:
The French government has moved swiftly, making a splash on April 26th in the Official Journal (JO), cancelling €3.1 billion in credits as part of their bigger €5 billion plan for 2025, initially announced by Bercy in early April.
Amélie de Montchalin, the Minister of Public Accounts, had earlier explained that this funds allocation was aimed to meet the public deficit targets for this year, considering lower growth in the context of an unstable world. In her words, "These €5 billion we're scrapping, delaying, or redirecting - it's our response to this volatile world. It's our way of dealing with whatever comes from this unpredictable world."
A portion of this adjustment has been executed through a decree in the JO. As stated in the decree, "To maintain a stable budgetary balance on the State budget," the decree provides for the cancellation of €3.1 billion in expenditure authorizations. It's clarified that these cancellations predominantly involve credits outside the wage mass, supposedly reserved at the start of the year. The decree adds that these cancellations should ideally not impact the execution of public policies significantly, in line with the initial 2025 finance law's agreed terms.
"Sticking to our guns on financial recovery"
The missions concerning ecology, development, and sustainable mobility (€549.6 million), economy (€517.7 million), research and higher education (€493.3 million), and even agriculture, food, and rural affairs (€140 million) are among the cancelled credits.
According to the decree, the recent economic downturn necessitates lower public revenues due to a revised growth forecast to 0.7%. The decree further stresses the need for an additional effort in spending control to maintain the trajectory of financial recovery, a commitment the government has made.
For a comprehensive understanding of what the State budget for 2025 contains, check out our article "What's really in the State budget for 2025" on our website with AFP. Don't forget to subscribe for more exclusive content!
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- The French government's financial recovery plan for 2025, initially announced by Bercy, includes a budgetary adjustment of €5 billion, with €3.1 billion in cancellations amidst geopolitical uncertainties, as stated in Amélie de Montchalin's statement.
- The budgetary cancellations, as outlined in the decree, involve a significant portion of the allocated funds for missions such as ecology, development, sustainable mobility, economy, research and higher education, and agriculture, food, and rural affairs.
- The decree emphasizes that these budgetary cancellations are a response to an unstable world and are essential for maintaining a stable budgetary balance on the State budget, while minimally impacting the execution of public policies, in accordance with the agreed terms of the initial 2025 finance law.
- In the face of an economic downturn and a revised growth forecast of 0.7%, the government is adhering to a strict spending control regime to maintain the trajectory of financial recovery, as declared in the decree.
