The countdown has begun for the preparation of budget 2011. Everything must be completed within one month, Baroin to present the draft budget law (PLF) in the Council of Ministers in late September, a priori, 29. The expenditure side has already been adjudicated in July. On the menu: flat spending on no-load state pension and debt, elimination of 100,000 jobs in the public in three years and freezing of the index of civil servants in 2011. It remains to decide on the issue "revenue". It is the most politically sensitive because it touches on taxes. Brégançon Friday's meeting set the framework: the savings in tax and social niches will reach 10 billion euros. Previously, Baroin spoke of an effort from 8.5 to 10 billion. But the revision of 2.5% to 2% growth forecast for 2011 requires finding 3-3500000000 to hold the budget.Hence the decision to cut more in the niches. Bercy has also reap additional revenue in 2010, including 2 billion through the resumption of employment, as announced by the Minister to Le Figaro. What started 2011 on a better footing. Finally, the department does not rule to revise the margin some expenses. Baroin defends the crucial lines of force.
LE FIGARO. – Are you not preparing a tight budget?
Francis BAROIN. – When developing a budget, there must be serious and make sense. Our meeting last Friday about the president and prime minister had intended to make choices to reduce public spending in order to achieve the 6% deficit in late 2011. It is the cornerstone of our policy.Everything must work towards this goal: we have an obligation to return as quickly to deficit levels before the crisis. This is a critical issue for our economic growth. The debt and deficits are the major topics of concern of the French, and we must demonstrate our ability to reduce, which will restore their confidence in the future and encourage them to consume and invest in return.
Why have revised down growth for 2011, while the activity was better than expected in recent months?
Economic activity in the first half of 2010 was in line with our expectations, and we should finish the year with growth of 1.4% or even above. For 2011, we forecast a proactive and realistic.Aim for 2% growth, consistent with the OECD projection is proactive because it's better than 2010, but is also realistic because we must not forget that a recession ever went there and that all countries that have suffered will take time to erase the traces.
Are you worried about the credit ratings of France?
No. Over the past two years, it was vital to sustain economic activity by injecting public spending. The revival in France, was very well calculated, and I see that despite large deficits our country continues to borrow at historically low levels on the markets. This indicates that investors have confidence in us.They know we have great resources at our disposal such as a savings among the highest in Europe.
If growth is higher than expected this year, can we expect increased revenue for the State and Social Security?
The good news critical of the first term is the creation of 60,000 jobs. The recovery of the labor market is expected to generate about 2 billion of additional social security contributions. In mid-September, we'll do the exact point on this revenue to build the draft law on financing of Social Security in 2011 on a solid and sincere.
And for the state?
Tax revenues are in line with our expectations. This is particularly the case of corporation tax, which is a very positive signal. The crisis resulted in 2009 by a collapse of social security contributions and tax revenue. We go out.Any additional revenues from the economic forecasting will be fully allocated to deficit reduction.
Nicolas Sarkozy announced Friday a cut of 10 billion in tax and social niches. Is not that a tax increase in disguise?
Absolutely not. No one is forced to use a niche tax to reduce his tax: it is a personal decision. In contrast, a general increase in taxation would penalize everyone. There is no question of doing so. We will not increase taxes, whether VAT, income tax or corporation tax. It is a very political choice, which corresponds to the commitment made by Nicolas Sarkozy during the presidential campaign. To reduce deficits, we have decided to act primarily on the expenditure, including that which passes through structural reforms.In a country where public expenditure accounts for over half of national wealth, is where are the flexibilities consistent.
All the niches are not "chosen". Some tax cuts meet family responsibilities, to situations of handicap, disability, age. Will they be trimmed as well?
Similarly we have not touched the RSA and social minimum, the vulnerable population will be spared by the plane or the removal of niches. Family policy will also be preserved. But it is true that the reduction of niches is an exercise in subtle and difficult. Found 10 billion in savings over 75 billion tax and spending 45 billion on social niches represents a substantial effort. But necessary. For years, the niches have been the choice of the facility.Sometimes washed sand.
The movement of the plane there will be enough to keep your goal?
First, I note that we have actually a little less than 2 billion to find the niches. For decisions taken in the context of pension reform and the level of those to be on the Cades (Sinking Fund of the social debt) will yield a total of over 7 billion. And, of course, we will also with a plane that will reduce by 10% the tax advantage of a number of devices. But this is not the only tool used. Some niches will be deleted. Other tax cuts would be concentrated or have their revised calculation method. The idea is to share the effort between businesses and households. We make our decisions be final in mid-September.
Investors fear being heavily utilized.Are they right?
One of the successes of the French economy is the savings of its households. We will be very careful not to destabilize it. In general, we want to protect the purchasing power of the French.
How to pay off the debt that Social Security has widened during the crisis?
Along with bills of state finances and Social Security, this fall, I will defend an organic bill to Parliament which will define the terms of repayment of 35 billion debt to Social Security that we will transfer to Cades . This organic law proposes to extend the four-year life of Cades, which is currently scheduled for late 2021. We also will allocate 3.2 billion euros of additional resources each year to Cades to be learned from the reduction or elimination of certain niches.Finally, Cades benefit from the recovery of the pension reserve fund which it will draw some resources.
You will increase the margin tax on certain investments of life insurance or income from movable capital (bonds, shares …) to finance the Cades?
It is a trail to the study among others.
Some members of the majority will once again seek an increase in the DRES …
We expect this debate during the fall, which is legitimate. But by offering 10 billion euros in savings on tax and social niches, we will show members that we have the means to finance the Cades without having to raise the CRDS.
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