7 billion planned for initial Finance Act

The economy Minister, Christine Lagarde, and Eric Woerth, Minister of public accounts, reviewed all the macroeconomic data for the period 2009-2012.

The growth divided by 5

The growth in 2009 "could settle in a range between 0.2 and 0.5 of GDP" instead of 1. In 2010, growth is revised to 2 compared to 2.5.

Inflation reduced to 1.5

Instead of 2 of the price increase next year, the Government reduces its forecast to 1.5. The price of a barrel is arrested at 72 dollars instead of 100. In addition, exchange rate assumption fixed euro to 1.33 dollar against 1.45 dollar previously.

The losses

fiscal 2008

reassessed to 7 billion

In 2008, the Government does more table on 5 but 7 billion euros of tax losses. The additional 2 billion are due to the decline in revenues from VAT and tax on corporations, for 1 billion in each case. Added additional losses 1 billion on social security revenues. For 2009, Bercy expects 9 billion euros of lower tax revenues (5.4 billion) and social (3.6 billion) from its September forecast. But the tax hike is not news, stressed Eric Woerth. Indeed, compulsory rate is maintained at 43.2 of GDP until 2012.

The pace of spending is still content

As expected, state appropriations increase no faster than inflation this year. In 2009 however, a slight departure from the rule of the "zero volume" progression of the State spending will be admitted: the pace will be 0.1 in current euros. For "exceptional circumstances", the Government has decided to let the endowments to local communities evolve faster than inflation. What may cause new restrictions in departments, in compensation, via implemented appropriations in reserve. Even if the interest on the debt will decrease of EUR 1.2 billion despite the swelling of the outstanding (with the decline in inflation) and interest rates, as well as loads of pensions of officials (EUR 150 million).

The deficit of the State approach to 58 EUR

In view of the worsening of the losses of revenue, the deficit of the State will reach EUR 51.4 billion in 2008 (49.4 billion expected in September and 41.7 billion planned for initial Finance Act). In 2009, he will go to 57.6 billion 52.2 billion voted last week by the National Assembly.

The public balance

beyond the limit of 3

For the past year, the deficit is expected to 2.9 of GDP rather than the 2.7 announced in September, because of the diving of the revenue. For 2009, the public deficit, instead of being limited to 2.7, will reach 3.1. The goal of moving closer to the balance at the end of legislature is definitively abandoned: 2012 deficit is estimated at 1.2 against 0.5 previously.

The Bank rescue plan bled away the debt

Reported GDP, public debt should reach a peak of 66 in 2009. The next year, the rate will be in fact of 67.9 before 68.1 in 2010. Absolute record which is explained by the budgetary slippage and the recent Bank rescue plan: the State borrowed 10.5 billion euros to recapitalize 6 credit institutions and 1 billion for Dexia.