France's government unveiled its 2025 budget on Thursday, outlining €60 billion ($65.68 billion) in spending cuts and tax hikes aimed at addressing the country’s public finance deficit.
Spending Cuts
Job Reductions: The government will eliminate 2,200 jobs, including a reduction in the number of teachers, in line with the expected decline in student numbers.
Foreign Aid: The foreign aid budget will be cut by €1.3 billion.
Apprenticeship and Job Subsidies: Subsidies for apprentices and other employment programs will be reduced by €2.1 billion.
Green Subsidies: Support for environmental initiatives, including subsidies for insulation and electric vehicle purchases, will be cut by €1.9 billion.
Pension Delays: The planned inflation-linked increase in pensions on January 1 will be postponed by six months, saving €3.6 billion.
Tax Increases
Big Companies: France's largest companies, with revenues over €1 billion, will face an additional tax on profits, expected to generate €8 billion. This tax will affect around 440 companies.
Wealthy Individuals: Individuals earning more than €250,000 annually will see a temporary increase in income tax. A minimum 20% tax will also be imposed to close loopholes, raising €2 billion per year.
Air Transport: A tax on airplane tickets and private jets will be increased, with the details to be discussed with industry representatives during parliamentary debates. Currently, France's tax per flight is €2.6, lower than in the UK or Germany.
Utilities: Nationalized power utility EDF will increase its dividend to the French state by €2 billion. Additionally, a tax on electricity, reduced to nearly zero during the recent energy crisis, will be raised to slightly more than its pre-war level, generating €3 billion.
Despite the tax hike, government officials stated that consumer electricity bills will still see a reduction of around 9%, owing to lower wholesale power prices.