(Minister of Finance and the Public Accounts)
The stability program foresees 1.5% growth in 2016 and 2017. And the deficit will be reduced to 2 7% of GDP.
How the measure will be funded on investment?
In 2015 The cost of the measure is financed by savings. 2016 and 2017, it will continue to be integrated into the frame and the consistency of our fiscal path and responsibility pact. To boost investment, it takes trust, which means taking our course, but also to give a boost in this direction.
This tax bonus there will therefore be a substitute for the decline in corporate tax provided for in the pact?
This does not prevent us to lower the rate of ‘corporation tax also, as has been announced. We are in a context of declining CIT rate.
What impact do you expect on investment and growth?
The stability program that I will present on April 15 by the Cabinet table on a fast and powerful recovery rate margin businesses, and a strong rebound in investment in 2016. Our macroeconomic scenario is intended prudent and realistic: we maintain our growth forecast to 1% this year, and then we expect 1.5% in 2016 and 2017. This caution is a deliberate choice that aims to give back to France all credibility. Our growth must now be regarded as floor targets and not as ceilings, even found good news in the future.
Is it consistent with lower unemployment?
If the expected growth is at the rendezvous, the economy should recreate jobs significantly from 2016. Therefore, stabilizing after a late 2015 Unemployment is expected to decline in 2016 and 2017.
Will tax weight down?
After rising sharply from 2011 to 2013, the tax burden has stabilized in 2014. Now we have entered a period of decline taxes, with measures of responsibility pact for small businesses and households. In September, 9 million households will see their taxes decrease. 44.7% of GDP last year, the tax burden will fall to 44.2% in 2017.
Will there of Further tax cuts for households or businesses, beyond what has already been announced?
The priority remains to implement the pact of responsibility and solidarity with tax cuts and loads.
Even if there is additional growth?
A additional growth must first help accelerate the decline in unemployment, knowing that, if there is additional revenue, they will go first to the faster decrease in our deficits.
Your new deficit forecasts they follow the recommendations of the European Commission?
Given the lower than expected deficit in 2014, we revised our forecast for 2015, with a deficit of 3.8% of GDP. We also draw the consequences for 2016 and 2017, with a projected deficit of 3.3% of GDP in 2016 and 2.7% in 2017. Our path is slightly better than that recommended by the European Commission. And we will achieve the 4 billion additional savings requested for 2015. This is precisely the amount that allow us to keep our plan of 21 billion savings and offset the impact of low inflation. For, on this point too, we are cautious: our scenario is based on inflation levels lower than expected ECB for 2015, 2016 and 2017. Again, we do not use any means to display a deficit path more favorable.
Brussels also requires a major structural effort of 0.8 to 0.9 percent of GDP in 2016 and 2017 …
Our plan 50 billion in savings to keep to the minimum effort required in 2016 and 2017. It is already a major effort. We will do nothing more that would prevent a return to growth of 1.5% per year.
Will public expenditure weights finally decrease
We expect a significant decrease from 2015 (excluding tax credits). This is a result all the more remarkable that GDP growth is still limited. The decrease in the weight of public expenditure will accelerate in 2016 and 2017. This is the result of 50 billion savings we will scrupulously implemented.
L commitment to stabilize the officials manning the five-year period is still valid, hiring was announced as part of the anti-terrorism plan?
No one disputes the need to strengthen our security . All this is financed by savings spread across all departments.
The debt is approaching the symbolic threshold of 100% of GDP …
I made a commitment that we would not reach this symbolic threshold, and our new fiscal path shows that this is a perfectly tenable commitment. The weight of the debt in GDP will be stabilized from 2016 and will begin to decline if growth is stronger than what we expect.
Do you quantified the savings on the cost of debt, interest rates should remain low as the ECB will apply its expansive strategy?
The savings on the cost of debt will exceed to those in the budget 2015 and they will be very significant again in 2016. When we refinance old debt for ten years at much lower rates than in the past, we realize a sustainable economy, structural.
Will there a supplementary budget by the summer, to integrate such measures on investment?
The issue is not settled, but from a technical point of view, there is no obligation to do so. The tax provision on investment will apply with retrospective effect, whether now or passed by year’s end.
Why not vote on Parliament on the stability program?
There will be a debate in early May after the summer recess, the whole of our European strategy. Christian Eckert and I will be in front of the Finance Committee of the National Assembly from the 15 and 22 April and available to the Senate.
The Commission also expected commitments on reform. Manuel Valls insists on the brakes to hiring in SMEs and the greatest place to be given to the agreements in the labor law. These are signals sent to Brussels?
If we are conducting such reforms, it is not to send signals but because we believe that it is important and necessary to promote employment. And I insist that this can be done in the framework of social dialogue. It does not reverse the hierarchy of norms, but to take account of specific companies and wishes expressed mostly by employees, as is already the case for social plans and maintenance agreements employment.
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