The Socialist Party and the government found common ground in the National Assembly on Monday regarding the surtax on corporate profits, appearing to make progress in the quest for a comprehensive budget agreement, although hurdles remain to be overcome on the taxation of assets or the suspension of pension reform.
Having been presented with the draft state budget, the deputies debated at length in the chamber the surtax on company profits.
As the discussions progressed, the government unveiled an amendment increasing the tax revenue from 4 to 6 billion euros, placing the burden of the increase on the largest companies.
Much to the dismay of members of the Ciotti UDR group, and even some LR and Macronist Renaissance elected officials who were calling for the outright cancellation of the measure.
Manuel Bompard (LFI) denounced a deal made "in parallel rooms" between the government and the PS, although his group voted for the measure.
"We have committed to ensuring that the government listens to the debates within the Assembly," retorted Economy and Finance Minister Roland Lescure.
Speaking to the press, the leader of the Socialist deputies, Boris Vallaud, expressed his circumspection regarding the disunity within the government camp. "There is no central bloc or common ground. This is not reassuring for the future," he pointed out.
The "next steps" this week will include the examination of the Zucman tax for a minimum taxation of wealth, or a lighter version of it put forward by the socialists, who expect the government camp to help to get it adopted.
Olivier Faure, head of the Socialist Party, raised the specter of another dissolution on Sunday if the government does not give in in the coming days to a tax on high fortunes.
Meanwhile, on Monday afternoon, members of parliament voted to reduce and accelerate the elimination of the business value-added tax (CVAE), a production tax criticized by both the government and the far right. The cost is €1.3 billion.
– On the horizon, pensions –
Late in the morning, PS MP Jérôme Guedj cautiously welcomed "weak signals" towards a global agreement, after the adoption in the Social Affairs Committee of his amendment raising the CSG on income from assets and capital, on the first day of the examination of the Social Security budget.
An adoption with the abstention of Macron supporters, who nevertheless expect safeguards to support the measure in the chamber from November 4, where parliamentarians will start from the government's initial copy.
The committee also voted against the government's proposed freeze on the scale used to calculate CSG rates, insisting on indexing it to inflation.
Another government measure rejected by the committee: the creation of an employer contribution on meal vouchers and holiday vouchers.
The flagship measure of the social security budget will remain the suspension of the pension reform, a condition for the non-censorship of the Socialist Party.
It will not be formally examined until the end of the debates, but the deputies have taken the lead by largely rejecting in committee the idea of a surtax on mutuals to finance it.
Left-wing groups, the National Rally and even The Republicans, members of the governing coalition, removed the article, all arguing that the sick would ultimately pay the bill.
The bill suspends until January 2028 the move towards raising the retirement age to 64, as well as the increase in the number of quarters required to retire at full rate.
The right wing opposes it and will propose lifting the suspension. If the National Assembly suspends it, the Senate (controlled by the right and centrists) will reinstate the reform, warned its president, Gérard Larcher.
Sébastien Lecornu met on Monday with the leaders of the right-wing and centrist groups in the Senate, who were irritated by the concessions made to the Socialists. "I have no deal with the Socialists," he assured them, according to several participants, indicating that he "understood" that the Senate also had "its own approach" to the budget.
The cost of suspending the pension reform is estimated at 100 million euros in 2026 and 1.4 billion euros in 2027. The proposed financing methods are controversial, while the draft social security budget is exceptionally financially rigorous, with massive savings to reduce the deficit to 17.5 billion in 2026 (23 billion in 2025).
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