The French Social Security deficit has been reduced by one billion euros, now projected at 15 billion euros for 2025. This adjustment follows amendments made during the Senate's examination of the Social Security financing bill.
Health Minister Geneviève Darrieussecq stated that this improvement reflects the financial implications of the amendments made since the beginning of the Senate debates. The initial forecast had estimated a deficit of 16 billion euros, indicating a positive shift in the government's fiscal outlook.
The revised budget includes the introduction of a new "solidarity contribution," expected to generate approximately 2.5 billion euros. This contribution is designed to equate to seven hours of unpaid work per year, providing a novel approach to enhancing revenue streams for the social security system. The government also plans to increase "behavioral" taxes on tobacco and soft drinks, projected to raise an additional 500 million euros. Higher taxation on bonus shares is anticipated to generate another 500 million euros, further bolstering the revenue side of the budget.
However, the Senate has voted on provisions concerning employer contributions that are expected to decrease revenues by 1.1 billion euros. Adjustments to the retirement fund for local civil servants and apprentices are projected to reduce revenues by 600 million and 200 million euros, respectively. These contrasting measures highlight the complexities of balancing revenue generation with the need to support various sectors within the social security framework.
On the expenditure side, the government faces additional challenges, with an increase of 300 million euros allocated to healthcare and 400 million euros earmarked for pensions. This increase in spending is largely attributed to a two-stage revaluation of pensions negotiated between Prime Minister Michel Barnier and right-wing figure Laurent Wauquiez. The compromise reached stipulates that pensions will be raised by half the rate of inflation on January 1, followed by a second half on July 1 for pensions below the minimum wage. However, it is important to note that this measure has yet to receive a vote in the Senate.
As the Senate continues to deliberate on the Social Security financing bill, more than 350 amendments remain to be examined, particularly concerning the expenditure aspect of the budget. The outcome of these discussions will be critical in determining the overall financial health of the French social security system and its ability to meet the needs of its beneficiaries in the coming years. The ongoing debates underscore the intricate balance that must be struck between revenue generation and expenditure management in the face of evolving economic conditions.