France at the time of economic choice

Ballot boxes have spoken. In the first round of the French presidential election, Emmanuel Macron received 27.84% of the vote, Marine Le Pen 23.15%, Jean-Luc Mன்சlenchon 21.95%, Eric Gemmore 7.07% and Valerie Begres 4.78%. The two candidates still on the list, Macron and Le Pen, are preparing for the second round of the election. The economic plans of the two candidates differ in their responses to the country’s economic challenges, but they are intertwined by triggering similar challenges. Because, in fact, regardless of the candidate selected for the next five years, the French economy will face the same challenges, which actually emerge from its structural context.

First, France is an aging country, albeit at a slower pace than other European countries due to its high fertility rate. In fact, France has about 20% of its population over the age of 65. Other countries are certainly older: Japan 27%, Italy 23%, and Greece then 22%, but France still has the 10th oldest rate of aging in the world. France’s aging rate has a maximum fertility rate of 1.9 children per woman in Europe, while the European Union and Germany have an average of 1.6. Admittedly France is aging much faster than other European countries, but it is aging uniformly. This brings back the debate to the inevitable question of retirement: how old? What cost funding?

Emmanuel Macron has announced his retirement from 62 to 65. It will be phased out and running until 2034. Therefore, the first generation to retire at age 65 will be born in 1969. He later softened his stance during the campaign, declaring that it could eventually be negotiated again until he turns 64. .

For his part, Marine Le Pen announced some time ago that he was returning to retirement age at 60, when he worked on his final project, the retirement age at its current level: 62 years. The second major issue facing France and of great interest to the French is taxation. Why? Because France is the world champion in tax pressure. Tax revenue and social security contributions make up 46% of France’s GDP, the largest in the European Union and the largest in the OECD. The European Union is at 40.2%, Germany at 40.5%, the OECD at 34% and the United States at 27%.

Not only is the tax burden on both households and businesses high, but in addition, it is not going to decrease because public funds are in significant debt. France ranks 7th among the 23 most advanced economies in the world, with public debt 116% of GDP by 2021. By comparison, the euro zone is 98% and Germany 70%. So France cannot reduce its financial pressure to maintain its debt consolidation path. This is why questions about taxation in the economic plans of both candidates are an important issue.

The two candidates naturally come together by promising to reduce taxes for the French – otherwise it will be difficult to get elected! But the means to achieve this are different. At Emmanuel Macron, we promise to raise the exemption ceiling during heirs, abolish the audiovisual tax paid by TV box owners and reduce production taxes to improve the competitiveness of companies. At Marine Le Pen, we promise to unconditionally repeal income tax for young people under the age of 30. It wants to privatize the public audiovisual pole. Finally, while Macron has repealed the wealth tax established by his predecessor Franுவாois Hollande, Marine Le Pen wants to convert it to a tax on financial wealth, if he so chooses, to convert it into a tax on real estate wealth.

In an environment marked by inflation of 7.5% in the euro area and 5.1% in France, purchasing power emerged as a major concern of the French during this campaign. Marine Le Pen promises to increase the purchasing power of the French by 200 euros a month. How? 100 Reducing the VAT on health and food items from 5.5% to 0%, reducing the VAT on energy (gas, heating oil, electricity, fuel) from 20% to 5.5%, and nationalizing motorways to reduce the cost of tolls. According to the candidate -15%, and by reducing the social security contributions paid by business owners they can increase the salaries of their employees. Emmanuel Macron, meanwhile, promises to triple the amount of annual bonuses employers can pay their employees free of charge or tax, and to use the new employee’s profit-sharing mechanisms to benefit companies.

Energy policy is finally the last major economic rift between the two candidates. Macron promotes a blend between nuclear and renewables, and Le Pen is particularly interested in nuclear power. In fact, Macron was reluctant to deal with nuclear energy at the beginning of his mandate, but he changed his position because only nuclear power can achieve France’s carbon neutrality by 2050. So he builds 6 new third generation nuclear reactors (EPRs). ) And maintain all installations that have been in operation for over 50 years.

On the renewable side, he promises to multiply the photovoltaics by 10 and create fifty windmills. According to Le Pen, only nuclear power can meet French energy needs: he promises to start construction of 10 new reactors. Among the renewals, he opposes wind power and proposes subsidies for wind turbines and a ban on the removal of the existing fleet. Its plan also states that it is interested in the development of the hydrogen and hydropower sectors.
What is France’s plan for the next five years? Reply Sunday, April 24, at 8 p.m.

By Omar Fazal