France Considers Reductions in Business Subsidies and Healthcare Expenditures

18 Nov, 2023

France Considers Reductions in Business Subsidies and Healthcare Expenditures

France's government is strategizing to trim spending on business subsidies and healthcare, intending to generate savings of 12 billion euros by 2025, according to sources within the government.

President Emmanuel Macron's administration aims to address France's extensive public spending, which currently ranks as the highest globally concerning the economy's size. To maintain commitments on deficit reduction, the government has set a goal to curb public spending.

The ongoing 2024 budget bill in parliament outlines plans for 16 billion euros in savings, majorly derived from phasing out temporary power and gas price controls.

Prime Minister Elisabeth Borne urged ministers to pinpoint an additional 12 billion euros in savings from 2025 as part of the routine spending review process. The focus is on various public funds aiding businesses and medical care, identifying areas for cutbacks in upcoming discussions.

The corporate sector receives substantial financial support of around 110 billion euros annually through cash grants and tax exemptions. The government plans to streamline and curtail inefficient or redundant aid to optimize expenditures, aiming for greater efficiency.

Simultaneously, France seeks to control the escalating healthcare expenses by reassessing approximately 80,000 partially subsidized medical products, costing about 16 billion euros yearly. The objective is to rationalize spending while maintaining quality healthcare services.

France has committed to reducing its public sector budget deficit from 4.9% of the economic output this year to the EU-mandated limit of 3% by 2027. However, the country's public audit office suggests this goal lacks ambition.