Inflation reinforces “social clientelism” – Le Temps

Rising prices lead to decisions that try to shield citizens from economic realities. Does Emmanuel Macron play the “illusionist”, to use the qualification given by Valérie Pécresse to the French president?

Household support is rising from the French government: extraordinary energy check (100 euros for 5.8 million households), inflation compensation (100 euros for 38 million people), tariff shield (for 5 million households), not to mention the discount of 15 øre per household. liters of fuel.

Bruno Le Maire tries to alleviate the inflationary shock, and in the process gives up “whatever it costs”, which was valid during the pandemic. Aid must be targeted, the government believes. We live in the “age of social clientelism”. The word is performed by Simone Wapler, the author of No, the state no longer protects us!in an article on counterpoints.

This exercise in defending purchasing power is, to say the least, complicated. Suffice it to look at a sentence from an interview with Bruno Le Maire, Minister of Economy: “I’m just saying that the total bill amounts to more than 20 billion euros on the sole protection of our countrymen from sky-high energy prices, and we are truly ready to do more, but it will not be “no matter what it costs” to pour gasoline on a fire, it gives targeted reactions.

The multiple layers of treasures

Simone Wapler is right to emphasize the absurdity of a world where state aid of 20 billion is at the same level as the tax revenue of 18 billion from the domestic consumption tax on energy products (TICPE). The French government gives with one hand what it receives with the other. But he does not want to lower energy taxes because it would benefit everyone, from the poor to the rich, and would be part of the “whatever it takes” strategy.

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Facts contradict the French government. Jean Castex has actually announced a discount of 15 cents per liter since the 1stuh April (shortly before the first round of the presidential election), which will benefit all motorists, poor and rich, for four months. Ironically, Dimitri Pavlenko, on CNews, launches: “for once, he targets everyone”. The journalist rightly adds that the government is “blurring the price signal” as it had previously decided to tax fuel more to save the planet.

His discount of 15 cents through a reduction in VAT does not hide the reasons for the increase in the price of gasoline, taxation. Dimitri Pavlenko did the math: The price of diesel cost 1.50 euros at the pump in 2008, when a barrel was worth $ 147.5. Today it costs 2.10 euros with a barrel for 105 dollars.

A dubious energy policy

If the government had lowered taxes, “there would not be [eu] enough social clientelism ”, states Simone Wapler. “After destroying the energy market for decades with delusions, the authorities claim to protect us from the evil they have created.”

President Macron has made “very bad decisions” in his energy policy, Judge Valérie Pécresse, in an interview with Figaro: “He closed Fessenheim and announced the closure of 12 reactors at the beginning of his term. We are five years behind. “Simone Wapler adds that” it is the actions of this government and its predecessors that have led to this situation by stopping nuclear power, by tying insane contracts on electricity prices to favor the prices of so-called renewable energy (in intermittent and non-intermittent energy). controllable practice). Result: the price of electricity depends on the price of gas! “

A money problem

The attitudes of the government are trying to hide the facts. Inflation is primarily monetary and cannot be combated through government intervention. It is by refusing to follow the advice of liberal economists to normalize monetary policy that we have opened the door to inflation.

While inflation rose to 5.8% in the zone, the ECB continued to increase its balance sheet, albeit at a slower pace. Its policy therefore remains accommodative at least until the autumn. However, the effects of a decision by a central bank are only visible in the price index about 24 months later.

The inflatable train will continue to roll at full speed for a long time. State aid will not mitigate the blow.

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