Report
France: Will it be possible to avoid a tax increase?
France’s public finances are currently as follows: As a result of the war in Ukraine, the fiscal deficit will be significantly higher than expected in 2022; The need for increased public spending is quite wide-ranging : healthcare, defence, industry, energy transition, education, justice, etc.; As a result of the series of crises and the continued contraction in industry, there is no reason to believe that potential growth will become higher; At some point, the ECB will raise interest rates to fight inflation, and fiscal rules will be reintroduced in the euro zone. Therefore, starting from a high fiscal deficit, it will be necessary to reduce it while increasing public spending. A pension reform would not be enough to solve this contradiction, and unfortunately it therefore seems inevitable that there will be an increase in the tax burden, which will create a conflict with the current desire to reduce taxes.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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