French local authorities ordered to slash spending by 13bln euros

As part of a French government drive to reduce public spending by 64.5 billion euros over the next five years, President Emmanuel Macron has announced that local authorities must slash their budgets by a total of 13 billion euros, which is 3 billion euros more than he pledged impose in his election manifesto.

This article is freely available. Check out our subscription offers. Subscribe

President Emmanuel Macron has announced that French local authorities will have to cut spending by a total of 13 billion euros between now and 2022, reports FRANCE 24.

Emphasising that “intelligent” savings can be found, Macron promised on Monday there would “deep reflection” on the matter. Anticipating pushback from unions and the Left, Prime Minister Édouard Phillipe said the government will not change its course.

Macron has undoubtedly already made his mark on the international stage, with the now infamous - and multiple - bone-crunching handshakes with US President Donald Trump and his surprisingly hostile joint press conference with Russian President Vladimir Putin in Paris.

But now he is turning his attention to critical domestic issues.

Macron is plunging feet first into one of France’s most serious problems: its ballooning budget deficit. The big question will be if this is the president who will finally succeed in reining in French spending.

Macron’s government also plans to scrap a local government tax for 80% of householders – even though this tax is local government’s principal source of funding (which goes towards services like schools and roads).

This follows on from the government’s announcement last week of 64.5 billion euros of cuts over the next five years – 4.5 billion euros more than originally announced – in order to reach the EU target of a budget deficit below 3% of GDP.

The French have seen what kind of president he will be internationally, and now they are getting a glimpse of the domestic Macron.

They propose to make up for the shortfall by increasing national income tax. But local authorities doubt that this compensation will make up for their estimated 8.5 billion-euro black hole this will create – especially after Macron’s statement on spending cuts.

“We don’t really believe that will happen,” Philippe Bas, Senator for the conservative Les Républicains party (LR), commented to Sud Radio.

This 13 billion-euro cut has come as a shock to many, as Macron pledged only 10 billion euros of cuts during the election campaign.

Read more of this report from FRANCE 24.

 

Extend your reading on Mediapart Unlimited access to the Journal free contribution in the Club Subscribe