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Paris (AFP) – Emmanuel Macron, re-elected as the French economy faces new headwinds, has set himself a series of ambitious goals. Here are the main economic projects of his second five-year term.
Inflation and purchasing power
The deterioration in purchasing power due to soaring inflation will remain the most urgent subject to be dealt with at the start of the five-year term.
Despite an energy “tariff shield” of more than 26 billion euros put on the table (freezing of gas and electricity tariffs, inflation compensation, fuel discount, etc.), the pressure on prices, in particular food, increases.
Emmanuel Macron affirms that it is above all employment that makes it possible to improve purchasing power, but he also promises, “from this summer, an exceptional law for purchasing power”, in particular to increase retirement pensions . It also offers a food check for the most modest, an increase in “social minima” and the treatment of civil servants, or even a new tax-free bonus.
Full employment
Emmanuel Macron wants to achieve “full employment” by the end of the five-year term, i.e. an unemployment rate between 5% and 5.5%, against 7.4% today.
To achieve this, he intends in particular to transform Pôle emploi into “France Travail”, in order to “pool” the forces of the State and the communities and to create a form of “one-stop shop” for job seekers, beneficiaries RSA, etc. This could result in a merger of the bodies concerned, which requires a long time, or simply better sharing of information between the actors.
He also intends to reform the vocational high school to make it “a path of excellence” on the model of learning which has experienced a boom during the five-year term. Aid for the recruitment of apprentices which ends in principle on June 30 will also be extended.
These projects would be accompanied by a new reform of unemployment insurance, which he wishes to make “stricter when too many jobs are unfilled” and “more generous when unemployment is high”. And an adaptation of the RSA, which he wants to allocate on the condition of performing 15 or 20 hours of “effective activity which allows integration”.
Debt and deficit
Emmanuel Macron has confirmed his ambition to bring the public deficit below 3% by 2027, and to start reducing the debt burden. The stakes are high, with a deficit that was still at 6.5% of GDP at the end of 2021, and a public debt at 112.9%, due to the health crisis linked to Covid-19.
No massive effort has really been announced on spending, the re-elected president relying heavily on growth and full employment to generate new revenue. To finance a program which he estimates the cost at 50 billion euros, he is counting on 35 billion in operating cost savings for the State and local authorities.
Flagship measure, the postponement of the retirement age to 65, will only generate savings in the medium term since it will come into force gradually.
Climate reindustrialization
By proposing to continue reducing production taxes, in particular by abolishing the contribution on added value (CVAE) for all companies, Mr. Macron wishes to encourage the reindustrialization of the country, which had barely begun under the previous five-year term.
Green hydrogen, electric vehicles, decarbonization of the steel industry and cement works, but also biomedicines: the reindustrialization bet which requires massive investments, part of which will come from the France 2030 plan launched before the election, must be articulated with the “planning “ecological announced by the presidential candidate between the two rounds. And a desire to promote local public purchases to defend “made in France”.
But this transition creates losers and the future executive will undoubtedly have to manage new complex files. There is no doubt that the difficulties of the Fonderies du Poitou or the Renault SAM subcontractor will be on the agenda for the first months of the five-year term.
Nuclear
Emmanuel Macron has announced his intention to relaunch a nuclear program with six new generation EPR2 reactors, praising in particular the climatic advantage of the electricity thus produced. Added to this is the study for eight additional copies.
This long-term project will not be completed during the five-year term. The first commissioning is not expected before 2035 or 2037. But the financial stakes are immediate and considerable, with an estimated cost of more than 50 billion euros for six reactors.
The sector must also demonstrate its ability to carry out such a program, after the excesses of the EPR site in Flamanville in Normandy.
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© 2022 AFP
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