French government focuses on absenteeism in pursuit of cuts - BNN Bloomberg

(Bloomberg) — The French government plans to tackle absenteeism in the civil service and cut development aid as part of a series of measures aimed at cutting €5 billion ($5.4 billion) in the budget of next year.

About half of the savings would come from eliminating a significant portion of reserves set aside for ministries to deal with unforeseen events, according to officials from the Ministries of Budget and Civil Service who declined to be named in accordance with the internal rules.

Prime Minister Michel Barnier has proposed €60.6 billion in spending cuts and tax increases in the 2025 budget in a bid to get the country’s rising deficit under control and boost investor confidence in the European Union’s second-largest economy .

The government announced for the first time on Sunday the share of the cuts, which it said would be introduced through an amendment during the parliamentary debate.

Officials said a plan to tackle absenteeism, which increased by 80% to 77 million days a year between 2014 and 2022 at a cost of €15 billion, would deliver around €1.2 billion in savings.

The Barnier government also proposed a €640 million cut in public development assistance, and €300 million from government contractors working with a surplus.

About €2.6 billion in savings would come from canceling part of the precautionary reserves. This would be shared by all ministries – except defense, home affairs, justice, higher education and research, and overseas territories – and they would have to prioritize spending, reduce operating costs and spread investment, the officials said .

France is under increasing pressure to get its budget in order after receiving its third warning in two weeks on Friday about the deterioration of public finances. Moody’s Ratings placed the country’s credit rating on a negative outlook. That came after Fitch rated its credit rating negatively and Scope Ratings downgraded it.

Barnier’s budget bill aims to reduce the deficit to 5% of economic output, from 6.1% to 6.2% this year, in a first step towards closing the gap within the 3% limit of the EU by 2029 – something the previous government had promised to do by 2027.

His task becomes more difficult because his minority government can easily be toppled by a vote of no confidence in the National Assembly. President Emmanuel Macron’s decision to call early elections this summer left a deeply divided lower house, with no group able to form an absolute majority to push through legislation.

The debate on the budget bill was suspended on Saturday and will resume on November 5.

The government has said it expects about two-thirds of the budget effort will come from spending cuts, with the rest from tax hikes on corporations and the wealthy.

Budget Minister Laurent Saint-Martin said in a post on the first phase. part of the bill.

National Rally MP Jean-Philippe Tanguy, who acts as the far-right party’s spokesperson on economic affairs, slammed Barnier and the conservative and centrist parties that make up the government for taking up parliamentary time by pushing amendments for their to submit its own bill.

He also said the Prime Minister had not responded to his budget proposals. His party matters because it has enough lawmakers to overthrow Barnier’s government by backing a vote of no confidence alongside the left-wing alliance New Popular Front.

“The government and the parties that support it have deliberately sabotaged this budget,” he told the France 3 television channel on Sunday. “We will not vote for this budget.”