Aug 22
Growing deficit menu Brégançon
Since 2007, Nicolas Sarkozy had never held a ministerial meeting in Fort Brégançon. He is preparing to inaugurate the formula Friday. In this presidential residence, nearby Cape Negro, where he spent the holiday, the Head of State shall convene, at five days of the Council of Ministers of return, Prime Minister François Fillon and Christine Lagarde (Economy) and Baroin (Budget). Who will come together to Paris on Friday morning. The workshop is expected to open about 11 am and finish around 14:30.
In convening this meeting Brégançon, the Head of State wishes to demonstrate that even on vacation he continues to work. "The Elysee is never on vacation," explains why an adviser to the president, adding that if "Brégançon was chosen because the building is equipped with all modern means of communication.""Brégançon is the Elysee summer," adds the same adviser. One of the relatives of the Head of State also confirmed that Nicolas Sarkozy "has spent holidays studious family". Multiplying telephone conversations with the Minister of Agriculture, Bruno Le Maire, to keep abreast of the milk crisis, and discussions with the Interior Minister, Brice Hortefeux, who needs to close 300 Roma camps of By the end of October. The president had he not asked his ministers at the Council on 3 August, to remain "vigilant"?
While many French will be Saturday on the way home, the Head of State wishes to draw their attention to growth and public finances, the menu of the game. This diptych is at the heart of the strategy of the Elysée and Matignon for several months.But five weeks after the presentation of the State budget and Social Security, the tradeoffs are of course come to these subjects much more important. From there to think that safety will take second place, there is not that the president does not seem ready to go. "We must walk on two legs: the security and economy, said Thursday the head of state to his friend Brice Hortefeux.
Dedicated to public finance issues, the meeting will turn mainly on the theme of growth. With a crucial question: what assumption of GDP growth for 2011 hold? The answer to this question will depend on forecasts of tax revenues for state coffers and Social Security. The meeting, however, should not lead to a formal review."The news on the economic front are good and they go beyond the track records of growth in the second quarter," says one government source, as: "a pleasant surprise on Social Security." These "good news" will in all likelihood, be a statement in the afternoon.
Thanks to the surprise of the second quarter, when France was up 0.6% of GDP, the government's forecast of a 1.4% overall growth for 2010 seems largely achievable. The final figure may even be slightly higher. Good news for tax revenues, in late June that popped up 22 billion compared to last year.Barring a sudden reversal of the global economy, the year 2010 could therefore end with a small "pot" for the state budget.
Arbitrations
But what about 2011? Economists are cautious and on average expect growth of between 1.5% and 1.8%. A forecast well below the government-sent in January in Brussels, betting on 2.5% growth. In the corridors of Bercy, working on a growth assumption closer to 2%. Knowing that any downward revision of 0.1 percentage points of GDP involves finding a little less than one billion of additional revenue if we want to prevent the deficit from getting worse.
A figure to relate to the 7 to 10 billion euros effort to reduce fiscal and social niches, already promised by the Executive for 2011.Precisely, these devices reduce taxes constitute the final point of the meeting of the day.
Main issue to be arbitrated: which of them to focus the effort? Several groups oppose the government, between those advocating a generalized movement of the plane with all those nooks and recommend confined to selected niches, that is to say, they deliberately used by households to reduce their taxes. This first solution is more sensitive politically, and constitutionally risky. Nicolas Sarkozy should not be decided Friday. According to one close to the Head of State, Friday's meeting, "is the last yard before the arbitration.
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