the reduction in social spending that was thwarted by the crises

Emmanuel Macron, candidate for re-election, France 24 takes stock of his five-year term in four parts. After foreign policy and economics, space in the social, where the priority of spending reduction has been thwarted by the Yellow Vests and Covid-19.

Emmanuel Macron’s desire to reduce social spending was not long in coming. From the summer of 2017, a few weeks after his election, the President of the Republic made the choice of budget cuts aimed at the most precarious: reduction of 5 euros in personal housing allowance (APL) and massive reduction of aid contracts.

Unpopular measures, but which respond to a budgetary context to which Emmanuel Macron is particularly attached at the beginning of his five-year term: increasing the purchasing power of French people and favoring companies by lowering taxes and social security contributions, while respecting the European budget. rules – these require reducing the general government deficit, which was 3.4% of GDP in 2016, below 3% – according to the head of state, it is important to cut social spending.

>> To read: Emmanuel Macron, the results (2/4): in economics, a drip drip

These decisions are accompanied by the justifications of the most audible members of the government, namely Prime Minister Édouard Philippe, Minister of Economic Affairs Bruno Le Maire and Minister of Public Accounts Gérald Darmanin, all from the right.

So much so that Emmanuel Macron’s first austerity measures, combined with the abolition of the wealth tax (ISF) or the introduction of a flat tax of 30% on capital income (“the flat tax”), quickly earned the head of state the nickname “president of the rich” .

A label that sticks so much more to his skin that Emmanuel Macron assumes he will review the French model of society deeply. “We put crazy money into social minima, people are still poor. We do not get out of it. People who are born poor remain poor. Those who become poor remain poor. (…) People must be taken responsibility “, he says in a video, published on June 12, 2018, showing him addressing his advisers on the eve of his speech at the Mutualité françaises congress.

Three months later, a “poverty plan” of 8.5 billion euros over four years is presented. This is supposed to revise the top-down French aid system to “eradicate extreme poverty” in one generation. It allows for free breakfast in certain schools, the canteen for 1 euro in certain municipalities, places in crèches for children from disadvantaged families, a public integration service and a universal activity income (RUA) that combines several social minima. The goals are ambitious, but will gradually be neglected. On the other hand, reducing spending in other sectors is a priority.

“There is no magic money”

Emmanuel Macron’s program provides 25 billion euros in savings, of which 15 billion in health. As a result, the public hospital budget does not meet the needs, especially due to the fall in hospital prices – which form the basis for the calculation of allocated resources – these have fallen by 7% between 2008 and 2018., according to the magazine Economic Alternatives. This situation is forcing healthcare professionals to work more and more under just-in-time conditions. To a relative who in April 2018 asked him for more resources, Emmanuel Macron replied that “there is no magic money”. For the President of the Republic, the logic is to respect France’s budgetary obligations to Brussels. And the results are there: France’s government deficit rose to 2.8% of GDP in 2017 and then 2.3% of GDP in 2018.

However, the increase in the carbon tax on fuels a few months later and the birth of the social movement Yellow Vests in November 2018 disrupted his plans. To begin with, the demonstrations in the roundabouts were not taken seriously by the executive, and in a few weeks they forced Emmanuel Macron to deviate from the planned lane.

To calm the uprising, in the first months of 2019, the head of state proposed a major national debate to gather the complaints of the French. It also takes far-reaching measures in favor of purchasing power, such as the reduction of € 5 billion in income tax, the increase in the € 100 activity bonus at the SMIC level or the revaluation of the minimum age. As for the increase in the carbon tax, it has simply been canceled. In total, 17 billion euros are added to the public accounts.

When the crisis was over, the government resumed its reforms with the aim of saving money, even though it meant attacking the unions even more. The situation is deteriorating in hospitals and leads to a greater mobilization of nursing staff throughout 2019. The government ends up releasing in November 2019 an envelope of 1.5 billion euros over three years, bonuses for nurses and nurses and the assumption of a third of hospital debt. Despite this “emergency plan”, caregivers believe the account is still not there. More than 1,000 hospital physicians, including 600 ward managers, resigned from their administrative functions in January 2020 in protest.

The unemployment insurance reform, which was adopted in 2019, tightens the conditions of admission and lowers the amount of benefits. Switching between short contracts and periods of inactivity will be penalized. And while Emmanuel Macron during his campaign had promised to allow the independent and resigned to be compensated, the required conditions make the unit very restrictive. Opening the system to too many people would have led to excessive spending, the government estimates, especially as candidate Macron’s goal was to save 10 billion euros on unemployment insurance.

>> To read: Strike against pension reform: the reasons for the mobilization

Finally, the pension reform that the government is embarking on at the end of 2019 also aims to save money thanks to a universal points system that is indexed to inflation and the establishment of a crucial retirement age. retired at age 64. Hundreds of thousands of people are demonstrating in the streets against the bill for long weeks, in late 2019 and early 2020, making the mobilization against pension reform the longest social conflict in the history of SNCF and RATP. The special regimes of their agents intended to disappear, according to the text of the law. The reform was finally adopted without a vote, on 29 February 2020, thanks to Article 49-3 of the Constitution.

“Whatever it takes”

But after the yellow vests, another unexpected event disrupts Emmanuel Macron’s budget ambitions. The Covid-19 pandemic, which emerged in China in late 2019, hit Europe and France in early 2020. The health and economic crisis it caused disrupted the end of the five-year period. In March, the head of state suspended the pension reform and postponed the full application of the unemployment insurance reform. Above all, it states “whatever it takes” to help the public hospital, save businesses, jobs and revive economic activity, which is suffering from a recession of 8%, without precedent since World War II.

The “magic money” being denied to nursing staff and many other sectors is now flowing. The health budget will increase by 9.4% in 2020 and 7.4% in 2021, while “Ségur de la Santé”, organized in the summer of 2020, will lead to an increase of 9 billion euros in the salaries of nursing staff. In total, the emergency measures taken in 2020 and 2021, according to the Ministry of Finance, cost 133.5 billion euros. The deficit will expand to 9.2% of GDP, and government debt will explode to more than 115% by 2020. The budgetary orthodoxy at the start of the five-year period then seems to be far away.

>> Reading: Public Hospital: Nursing Staff Condemns “A Discrepancy Between Words and Acts” by Emmanuel Macron

However, the impending 2022 presidential election is pushing Emmanuel Macron to make promises of seriousness to his right-wing voters. The unemployment insurance reform will enter into force in the autumn of 2021. And some music about the citizens’ duties will settle in the last months of the five-year period. “We want to continue to redefine our social contract, with duties that come before rights, from respect for authority to social benefits,” government spokesman Gabriel Attal said on January 29 in a statement.interview with Parisian.

A philosophy confirmed on March 17 during the presentation of Presidential candidate Emmanuel Macron’s program: the latter intends, in the event of re-election, to subject the payment of the Active Solidarity Income (RSA) “obligation to set aside 15 to 20 hours per week to an activity leading to professional integration, either training in integration or employment “. With regard to pensions, the reform he is considering will raise the legal retirement age from 62 to 65.

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