Key Benefits:
The National Assembly and the Senate deliberated,
The National Assembly adopted,
The President of the Republic enacts the following legislation:
Is approved the report annexed to this Act, as provided for inArticle 5 of Organic Law No. 2012-1403 of 17 December 2012 relating to the programming and governance of public finances.
The medium-term objective of public administrations mentioned in b of 1 of Article 3 of the Treaty on Stability, Co-ordination and Governance within the Economic and Monetary Union, signed in Brussels on 2 March 2012, is set at - 0.4% of the potential gross domestic product.
The structural balance corresponding to the medium-term objective mentioned in the first paragraph is reached in 2019.
In the macroeconomic context and based on the assumptions and methods used to establish the programming, as described in the report referred to in section 1 of this Act, the evolution of the structural balance of public administrations, as defined in Schedule 4 to the report annexed to this Act, is as follows:
(In potential gross domestic product points)
| Structural balance | - 2.4 | - 2.1 | - 1.8 | - 1.3 | - 0.8 | - 0.2 |
Deduction of the impact of tax credit accounting procedures as amended by Regulation (EU) No 549/2013 of the European Parliament and Council, of 21 May 2013, on national and regional accounts in the European Union, the structural adjustment expected in 2015 was 0.5% of the potential gross domestic product.
In the macroeconomic context and based on the assumptions and methods used to establish the programming referred to in Article 2:
1° The evolution of the actual public balance, the economic balance, the temporary and ad hoc measures, the structural balance and the public debt is as follows:
(In gross domestic product points)
| Actual public balance (1 + 2 + 3) | - 4.4 | - 4.1 | - 3.6 | - 2.7 | - 1.7 | - 0.7 |
| Economic balance (1) | - 1.9 | - 2.0 | - 1.7 | - 1.4 | - 0.9 | - 0.5 |
| Ad hoc and temporary measures (2) | 0.0 | -0.1 | - 0.1 | 0.0 | 0.0 | 0.0 |
| Structural balance (potential GDP points) (3) | - 2.4 | - 2.1 | - 1.8 | -1.3 | - 0.8 | - 0.2 |
| Public administration debt | 95.2 | 97.1 | 97.7 | 97.0 | 95.1 | 92.4 |
| Debt of public administrations, excluding financial support to the euro area | 92.0 | 94.0 | 94,7 | 94.0 | 92.3 | 89.6 |
2° The evolution of the actual public balance, which is declined by subsector of public administrations, is as follows:
(In gross domestic product points)
| Actual public balance | - 4.4 | - 4.1 | - 3.6 | - 2.7 |
| including: | ||||
| - central government | - 3.6 | - 3.6 | - 3.3 | - 2.7 |
| - Local government | - 0.3 | - 0.2 | - 0.3 | - 0.3 |
| - Social security administrations | - 0.5 | - 0.3 | 0.0 | 0.3 |
The objective of structural effort of public administrations is as follows:
(In potential gross domestic product points)
| Structural effect | 0.4 | 0.6 | 0.2 | 0.3 |
| including: | ||||
| - new measures on mandatory sampling | 0.1 | 0.1 | -0.1 | -0.2 |
| - expenditure | 0.2 | 0.5 | 0.4 | 0.5 |
In the macroeconomic context and based on the assumptions and methods used to establish the programming referred to in Article 2, the objectives of the evolution of public expenditure and the rate of mandatory sampling are as follows:
(In gross domestic product points)
| Public expense, excluding tax credits | 56.5 | 56.1 | 55.4 | 54.5 |
| Compulsory sampling rate | 44,7 | 44,7 | 44.5 | 44.5 |
| Public Expenditure, including Tax Credits | 57.7 | 57,5 | 56.9 | 56.0 |
I. - When significant deviations, within the meaning ofArticle 23 of Organic Law No. 2012-1403 of 17 December 2012 referred to above, are found between the execution of the past year and the trajectory of structural balance described in Article 2 of this Act, the Government, in accordance with its commitments as they arise from the treaty referred to in Article 2:
1° Explains the reasons for these discrepancies in the consideration of the draft regulation legislation by each assembly. These deviations are assessed as part of an assessment that refers to the structural balance and includes an analysis of the underlying structural effort defined in the report referred to in Article 1;
2° Proposes correction measures in the report on the evolution of the national economy and on the directions of public finances mentioned in theArticle 48 of Organic Law No. 2001-692 of 1 August 2001 relating to the financial laws, which are taken into account in the next financial bill of the year or the Social Security Financing Bill of the year. These corrections allow the return to the structural balance trajectory described in section 2 of this Act within a maximum period of two years from the end of the year in which the deviations were found. They cover all public administrations.
II. - The obligations under 2° I of this Article shall not apply in the event of exceptional circumstances which justify the deviations found, as defined in b of 3 of Article 3 of the Treaty referred to in Article 2.
III. - When exceptional circumstances have disappeared, the Government introduces a bill for public finance programming in line with the European obligations of France, at the latest during the consideration of the next draft financial law of the year.
IV. - There is a public finance conference involving representatives of the various subsectors of public administrations in the sense of national accounts. It meets in the event of a significant deviation within the meaning of I, and at least once a year.
The public finance conference prepares a diagnosis on the state of public finances and appreciates the conditions required to ensure respect for the trajectory of public finances. To this end, it assesses, among other things, the contribution of the various public administrations required to ensure compliance with this trajectory and may make any recommendation to ensure the achievement of the medium-term objective.
A decree determines the composition and functioning of this conference.
In the macroeconomic context referred to in Article 2, the objectives of the evolution of the public spending of subsectors of public administrations are as follows:
Growth rate of public expenditures in value, excluding tax credits
%
| Public administration, excluding tax credits | 1.4 | 1.1 | 1.9 | 1.9 |
| including: | ||||
| - central government | 0.4 | 0.1 | 0.7 | 0.4 |
| - Local government | 1.2 | 0.5 | 1.9 | 2.0 |
| - Social security administrations | 2.3 | 0.8 | 2.1 | 2.3 |
| Public administration, including tax credits | 2.2 | 1.5 | 2.0 | 2.0 |
| Central public administrations | 2.5 | 1.2 | 1.0 | 0.8 |
I. - The aggregate consisting of the expenses of the general budget of the State, excluding refunds and discounts, tax levies and ceilings of all kinds referred to in I of Article 46 of Law No. 2011-1977 of 28 December 2011 for 2012, in its drafting resulting from Act No. 2014-1654 of 29 December 2014 of finance for 2015, cannot, at constant scope, exceed €372.68 billion for each year 2015, 2016 and 2017, in constant euros of 2014. This amount is updated based on the forecast of consumer price changes, excluding tobacco, associated with the year's financial bill for each of the years 2015 to 2017.
II. - Out of debt burden and out of contributions to the "Pensions" trust account, this aggregate, expressed in current euros, is equal to 282.54 billion euros in 2015, 280.67 billion euros in 2016 and 275,51 billion euros in 2017.
The overall ceiling on employment authorizations of the State and its operators, mentioned in articles 54 and 55 of Act No. 2014-1654 of 29 December 2014 of finance for 2015, is stabilized for the years 2012 to 2017.
I. - The objective of expenditure of the mandatory basic social security plans cannot, at constant scope, exceed the following amounts, expressed in billions of current euros:
| 476.6 | 486,8 | 498.3 |
II. - The national objective of health insurance expenditures of all mandatory basic social security plans mentioned by the Act No. 2011-1906 of 21 December 2011 Social Security Funding for 2012, as amended byArticle 78 of Act No. 2014-1554 of 22 December 2014 for 2015 social security financing cannot, at constant scope, exceed the following amounts, expressed in billions of current euros:
| 182.3 | 186.0 | 18.5 |
I. - Territorial authorities contribute to the effort to rehabilitate public finances, in the manner in which they are involved.
II. - It is established an objective of evolution of local public expenditure, expressed as a percentage of annual evolution and at constant scope.
This objective is as follows:
Rate of local expenditure in value - expressed in general accounting
%
| Purpose of local public expenditure | 1.2 | 0.5 | 1.9 | 2.0 |
| Changes in operating expenses | 2.8 | 2.0 | 2.2 | 1.9 |
The local public expenditure, expressed in value, is defined as the sum of the actual expenditures in general accounting of the operating and investment sections, net of debt amortizations.
III. - The Government shall submit to the Finance Committees of the National Assembly and the Senate, in advance of the consideration of the year's bill of finances, the assumptions for the calculation of the objective of local public spending.
This objective is determined after consultation with the local finance committee and then followed, during the year, in connection with this committee.
I. - Each year, on average for all programs in the general budget of the State with limiting credits, are subject to at least 0.5% of the payment credits and commitment authorizations opened on title 2 "Personal expenditures" and at least 6% of the payment credits and commitment authorizations opened on other securities. The application of the reserve rate on title 3 "Operating expenses" may be modified based on the nature of the expenses incurred by organizations receiving a public service subsidy.
The amount of credits, subject to the conditions referred to in the first paragraph of this I, on title 2 "Personal Expenditures" and on other titles, is detailed and justified for each program in the billing financial bills.
The amount of credits available for each program is communicated to the Finance Committees of the National Assembly and the Senate no later than January 15 of the year following the adoption of the Finance Act of the year.
II. - Effective January 1, 2015, a fraction representing at least 0.3% of the national health insurance expenditure target for all of the mandatory basic social security plans mentioned inArticle LO 111-3 of the Social Security Code is reserved at the beginning of each fiscal year.
In 2015, 2016 and 2017, the budget caps allocated to the missions of the general budget of the State, excluding the contribution of the general budget to the "Pensions" trust account, excluding debt charges and without refunds and debursements, cannot, at constant scope, exceed the following amounts, expressed in billions of current euros:
| External action of the State | 2.80 | 2.84 | 2.81 | 2.96 | 2.74 |
| General and territorial administration of the State | 2.20 | 2,17 | 2,29 | 1.92 | 2,30 |
| Agriculture, food, forest and rural affairs | 2.93 | 2.93 | 2.66 | 2.52 | 2.49 |
| Official development assistance | 2.87 | 2.87 | 2.77 | 2.67 | 2.60 |
| Veterans, memory and ties with the Nation | 2.89 | 2.89 | 2.74 | 2.63 | 2.51 |
| Council and State control | 0.49 | 0.49 | 0.50 | 0.50 | 0.51 |
| Culture | 2,39 | 2,39 | 2,39 | 2.38 | 2,39 |
| Defence | 29,60 | 29,60 | 29,00 | 29,52 | 30.05 |
| Government Action Directorate | 1,13 | 1,14 | 1,17 | 1,16 | 1,17 |
| Ecology, sustainable development and mobility | 7.14 | 7.06 | 6.61 | 6.55 | 6.52 |
| Economy | 1.68 | 1.63 | 1.54 | 1.51 | 1,48 |
| Equality and housing | 7.40 | 13.11 | 13.18 | 13,31 | 13.15 |
| State financial commitments | 1.00 | 1.00 | 0.88 | 0.84 | 0.68 |
| School education | 46,31 | 46.30 | 47,47 | 47.8 | 48.19 |
| Financial and human resources management | 8.70 | 8.70 | 8.51 | 8.32 | 8.14 |
| Immigration, asylum and integration | 0.66 | 0.65 | 0.65 | 0.65 | 0.66 |
| Justice | 6.27 | 6.28 | 6.33 | 6.27 | 6.31 |
| Media, book and cultural industries | 0.81 | 0.81 | 0.71 | 0.63 | 0.55 |
| Outre-mer | 2.01 | 2.01 | 2.01 | 2,06 | 2,10 |
| Policy of the Territories | 0.81 | 0.81 | 0.74 | 0.70 | 0.66 |
| Public authorities | 0.99 | 0.99 | 0.99 | 0.99 | 0.99 |
| Research and higher education | 25,73 | 25,73 | 25,61 | 25,66 | 25,72 |
| Social and pension schemes | 6.51 | 6.51 | 6.41 | 6.40 | 6.40 |
| Health | 1,30 | 1,17 | 1.20 | 1,22 | 1.23 |
| Security | 12.12 | 12.15 | 12.15 | 12.18 | 12.18 |
| Solidarity, integration and equality of opportunity | 13.65 | 15,38 | 15,53 | 15,79 | 15,98 |
| Sport, youth and associative life | 0.45 | 0.45 | 0.45 | 0.50 | 0.54 |
| Labour and employment | 10,78 | 11,41 | 11,18 | 10.62 | 9,84 |
| For memory, Undistributed Credits (excluding parliamentary reserve) | 0.04 | 0.04 | 0.01 | 0.02 | 0.02 |
| In memory, Relations with Territorial Communities (excluding parliamentary reserve) | 2,614 | 2.69 | 2.73 | 2.73 | 2.73 |
All State financial competitions to territorial authorities cannot, at constant scope, exceed the following amounts, expressed in billions of current euros:
| 56.87 | 53.45 | 49.79 | 46.12 |
This set consists of:
1° State revenue levies established for the benefit of local authorities;
2° The general budget appropriations under the "Re Relations with Territorial Communities" mission, excluding appropriations under the Parliamentary Reserve.
The modalities for the distribution of these competitions are determined in association with local authorities.
The annual reduction of the sum of the tax caps of all kinds referred to in I of Article 46 of Law No. 2011-1977 of 28 December 2011 for 2012, as amended by Article 31 of Act No. 2014-1654 of 29 December 2014 of finance for 2015, is, at a constant scope, at least equal to the following amounts, expressed in millions of current euros:
| 283 | 135 | 86 |
I. - Effective January 1, 2016, the allocation of taxation of all kinds to third parties other than territorial authorities, public inter-communal cooperation institutions and social security organizations may only be instituted or maintained if it meets one of the following criteria:
1° The resource is in relation to the service rendered by the employee to a user and its amount must be able to be assessed on objective basis;
2° The resource funds, within a sector of activity or profession, actions of common interest;
3° The resource feeds funds requiring regular financial reserves.
The use of assignments is detailed in the annex to the report annexed to this Act.
II. - A new assignment is accompanied, in the departmental field of the newly affected taxation, by the deletion of one or more taxations affected by an equivalent return. The newly assigned resource is a cap.
III. - As of January 1, 2016, the impositions of all kinds affected to third parties other than territorial authorities, public inter-communal cooperation institutions and social security organizations are capped under the mechanism provided for in theArticle 46 of Act No. 2011-1977 of 28 December 2011 referred to above. Any change in the level of cap of the taxes referred to in this III is justified.
IV. - As of January 1, 2017, the impositions of any kind to third parties other than territorial authorities, public inter-communal cooperation institutions and social security organizations that have not been capped under the III are allocated or reassigned to the general budget of the State. The provisions of the 2017 Finance Bill derogating from this provision are specifically justified.
Any surpluses, found in relation to the assessments of the Financial Law of the Year or the Social Security Financing Act of the Year, the proceeds of taxation of all kinds established for the benefit of the State or the contributions and contributions of social security to the mandatory basic plans and the organizations involved in their financing are used in full to reduce the public deficit.
The impact of mandatory sampling measures, adopted by Parliament or taken by the Government by regulation as of 1 July 2012, cannot be less than the following amounts, expressed in current billions of euros:
| - 2 | - 6 | - 8 |
The incidence referred to in the first paragraph is appreciated a given year in relation to the situation of the previous year.
I. - The annual tax expenditure cannot exceed 80.6 billion euros in 2015, 81.8 billion euros in 2016 and 86 billion euros in 2017.
With a view to appreciating compliance with this multi-year orientation, the calculation of the variation in this amount from one year to the next includes exclusively the impact of spontaneous growth and the creations, modifications and removals of expenditures referred to in the first paragraph of this I.
II. - The annual amount of tax credits cannot exceed 24.7 billion euros in 2015, 25.9 billion euros in 2016 and 30.1 billion euros in 2017.
With a view to appreciating compliance with this multi-year orientation, the calculation of the variation in this amount from one year to another exclusively includes the impact of spontaneous growth and the creations, amendments and deletions of the tax credits referred to in the first paragraph of this II.
Effective January 1, 2015, the annual amount of exemptions or summaries and reductions in rates for social security contributions and contributions to the mandatory basic plans or organizations that contribute to their funding, excluding measures to extend the reduction of the employer's dependant contributions referred to in the employer's dependantsArticle L. 241-13 of the Social Security Code, cannot exceed the amount of the previous year.
With a view to appreciating compliance with this multi-year orientation, the calculation of the variation of this amount from one year to the next includes exclusively the impact of the spontaneous growth of the devices listed and encrypted in the annexes to the Social Security Financing Bill of the previous year, as well as the creations, modifications and removals of exemptions or trimmings mentioned in the first paragraph of this section.
The creations or extensions of tax expenditures, on the one hand, and the creations or extensions of exemptions or trimmings and reductions of rates applicable to social security contributions and contributions to the mandatory basic plans or to the organizations involved in their financing, on the other hand, established by a text after January 1, 2015, must be reviewed no later than three years before the expiry of the term
I. - With a view to clarifying its preparation, is attached to the year's financial bill, an annex listing the expenditure reviews that the Government plans to conduct before the end of February of the year following the adoption of the said financial law. It covers all expenses and means of public administrations or entities receiving public competitions, as well as tax credits, tax expenditures, exemptions or countdowns, and reductions in rates for contributions and social security contributions to mandatory basic plans or organizations that contribute to their funding, with a view to identifying potential sources of savings. This annex sets out the expected savings targets for each of them, as well as a balance sheet of previous expenditure reviews, specifying the amount of savings achieved against the original objectives.
II. - The schedule referred to in I also includes a list of expenditure reviews conducted in the 12 months prior to the filing of the year's financial bill. It outlines the main findings and proposals resulting from these reviews, and specifies, where appropriate, the measures envisaged for the implementation of these proposals, as well as the expected savings objectives for each of them.
III. - The Government shall transmit to Parliament, no later than March 1 of the year following the adoption of the Financial Act of the year, the findings and proposals of the expenditure reviews referred to in I.
For any measure, which has come into force for a limited period of time from 1 January 2015, the creation or extension of a tax expenditure or the creation or extension of an exemption or a reduction in the amount of a debt or a reduction in the rate applicable to social security contributions and contributions assigned to the mandatory basic plans or organizations that contribute to their funding, the Government shall submit to Parliament no later than six months before the time limit This assessment includes the main characteristics of the measurement recipients and provides details on their effectiveness, contribution to the quality of life and sustainable development indicators defined in the statistical annex, Volume 2, of the economic, social and financial report, impact on employment, investment and the ecological and energy transition and cost.
A Schedule to the Financial Bill of the Year is attached to the financial bill that lists the tax credits and presents the amounts executed, declined for each tax credit, for the preceding two years.
The I of Article 12 of Act No. 2010-1645 of 28 December 2010 for the years 2011 to 2014 is thus amended:
1° In the first sentence, the words "(EC) No. 2223/96 of the Council of 25 June 1996 on the European System of National and Regional Accounts in the Community" are replaced by the words "on the European System of National and Regional Accounts in force";
2° It is added a paragraph to read:
"For any newly listed organization, the prohibition applies one year after the publication of the order amending the said list. »
I. - Section 14 of Act No. 2006-888 of 19 July 2006 finalizing the 2005 budget is supplemented by four paragraphs as follows:
"This annex also presents:
« 1° Operators and other State-controlled public bodies having been deleted or created in the year before the filing of the year's financial bill;
« 2° A balance sheet, covering at least three fiscal years, the evolution of the payroll of the operators, their own resources, their working capital, the total of the jobs paid by them, the execution of the employment ceilings, as well as the budgetary appropriations or the taxes allocated to them;
« 3° The evolution, over the last three fiscal years, of the gross useful surface of the operator's real estate park as well as the ratio between the number of workstations and the net useful surface of the real estate park. »
II. - Operators and other public bodies controlled by the State whose staff are greater than ten persons make public, each year, the sum of the ten largest gross total remuneration of the institution.
Entities other than territorial authorities and social security organizations with taxation of all kinds and directly recovering their proceeds shall annually transmit to their guardianship authorities or, failing that, to the Minister responsible for Finance, the attitude and proceeds of such taxation of all kinds:
1° Prior to 31 March, data relating to the last fiscal year ended;
2° Prior to June 30, for forecast data for the current fiscal year and the following fiscal year.
The underlying assumptions and calculations must also be transmitted to these data.
I. - Section L. 6143-4 of the Public Health Code is amended as follows:
1° After the 2°, it is inserted a 2° bis as follows:
« 2° bis The statement of income and expenditure forecasts, excluding the annexes, as well as the multi-year funding plan, referred to in the 5th of section L. 6143-7, shall be deemed to have been approved if the Director General of the Regional Health Agency has not made his opposition known on time and for reasons determined by decree.
"For health facilities subject to a recovery plan pursuant to section L. 6143-3, the statement of income and expenditure forecasts and its annexes, as well as the multi-year overall funding plan, referred to in section L. 6143-7, are subject to express approval by the Director General of the regional health agency.
"In the case set out in the second paragraph of this 2° bis, the statement of income and expenditure forecasts cannot be approved by the Director General of the Regional Health Agency if the evolution of the workforce is manifestly incompatible with the evolution of the activity of the health establishment.
"The modalities for the application of the second and third paragraphs of this 2° bis are fixed by decree; »
2° The seventh preambular paragraph is deleted;
3° In the fifth preambular paragraph, the reference: "seventh preambular paragraph" is replaced by the reference: "2° bis";
4° At the end of the first sentence of the penultimate paragraph, the reference: "of the preceding paragraph" is replaced by the reference: "of 2° bis of this article".
II. - Section L. 6162-11 of the same code is amended as follows:
1° The second preambular paragraph reads as follows:
"Le 2° bis et l'avant-dernier alinéa de l'article L. 6143-4 sont applicable au 3° du même article L. 6162-9. » ;
2° In the last paragraph, after the reference: "9°", the words "of the same article" are replaced by the reference: "of the said article L. 6162-9".
III. - In the first sentence of the second paragraph of Article 1 of Law No. 2009-879 of 21 July 2009 on hospital reform and on patients, health and territories, the references: "the seventh and eighth paragraphs" are replaced by the references: "the second paragraph bis and the penultimate paragraph".
IV. - The Government shall report annually to Parliament no later than 15 October on the evolution of expenses and products and the debt of health institutions. The data on staff costs include, among other things, classy measures for hospital and medical officials, the assessment of their cost for the last fiscal year, a forecast for the coming year of the annual cost of the previously decided class measures, as well as a presentation of the overall salary changes experienced by public health institutions staff.
I. - An annex to the financial bill details, for each of the sub-sectors of public administrations, the forecast for the coming year of structural balance, cyclical balance and actual balance, together with the forecast of income and expenditure.
II. - The schedule referred to in I specifies, for each of the organizations in the category of social security administrations other than the mandatory basic plans, the outlook for income, expenditure, balance and debt.
The working code is thus modified:
1° Chapter II of Book IV, Part 5, chapter II, is supplemented by section 6 as follows:
“Section 6
"Financial monitoring of the unemployment insurance plan
"Art. L. 5422-25. - The unemployment insurance management organization referred to in Article L. 5427-1 transmits annually to Parliament and the Government, by 30 June, its three-year financial outlook, including the effects of the economic component of the evolution of wage employment and unemployment on the financial balance of the unemployment insurance scheme.
"In light of this report and other available information, the Government shall forward a report to Parliament and to the management social partners of the organization referred to in the first paragraph of this article, by December 31, on the financial situation of unemployment insurance, including measures implemented and those likely to contribute to the achievement of the medium-term financial balance. » ;
2° In the first paragraph of Article L. 5422-20, after the reference: "L. 5422-16", the reference is inserted: "and Article L. 5422-25".
I. - The Government shall submit annually to the Local Finance Committee, prior to the public finance policy debate, a report presenting the assessment of the implementation of the local public spending target set out in Article 11 II of this Act. This report is forwarded to the Finance Committees of the National Assembly and the Senate.
As of 2016, the Government also submits to this committee a decomposition, over the entire programming period, of the objective mentioned in the first paragraph of this I for public institutions of intercommunal cooperation in clean taxation and for each of the three categories of communities: regions, departments and communes. On this occasion, he received the advice of the committee.
II. - A general annex is attached to the year's financial bill detailing the individual powers paid to the territorial authorities or, where applicable, the levies they are subject to, for the previous year. It deals with the funds financed by levies on state revenues or by credits on the "Re Relations with Territorial Communities" mission, the equalization funds between communities and the taxation transferred to various titles. It separates each device within that perimeter.
These individual data are made available to the public on the internet, in a single document, in a form likely to be exploited through database processing software.
The Government shall submit to Parliament, in advance of consideration of the year's bill of finance, the assumptions for the calculation of the tendential growth of the public spending of sub-sectors of public administrations and the amount of that growth, expressed in absolute value.
The Government transmits annually to Parliament, by 15 April, the estimate of the level of public debt for the past year notified to the European Commission pursuant to Council Regulation (EC) No 479/2009 of 25 May 2009 on the application of the protocol on the procedure for excessive deficits annexed to the Treaty establishing the European Community. This estimate is expressed as a nominal value and as a percentage of the gross domestic product of that same year.
The Government shall annually transmit to Parliament an assessment of the implementation of this Act and of the existing articles of the previous Financial Regulations. This assessment, in particular, indicates the performance data, at constant scope, of the objectives set out in sections 2 to 5 and 7 to 21 of this Act. It also provides a justification for any discrepancies between the commitments made in the last stability programme transmitted to the European Commission and the forecasts of this Act.
This assessment is made public at the same time as the report provided for inArticle 48 of Organic Law No. 2001-692 of 1 August 2001 Financial laws.
I. - Notwithstanding any provision to the contrary of the texts applicable to them, the bodies, other than the State, falling under the category of central public administrations and whose list is established by the decree mentioned in the I of Article 12 of Act No. 2010-1645 of 28 December 2010 public finance programming for the years 2011 to 2014, as well as public health institutions and public morality health cooperation structures, cannot conclude the following contracts:
1° Partnership contracts, within the meaning ofOrder No. 2004-559 of 17 June 2004 on partnership contracts;
2° Temporary occupancy authorizations, within the meaning ofArticle L. 2122-6 of the General Code of Public Ownership, administrative emphyteotic leases, within the meaning of Article L. 2341-1 of the same code, hospital emphyteotic leases, within the meaning ofArticle L. 6148-2 of the Public Health Code or leasing contracts, in the sense of Articles L. 313-7 to L. 313-11 of the monetary and financial code, for the purpose of carrying out, modifying or renovating works, equipment or immaterial goods that meet a need specified by the public community and intended to be made available to it or to become its property.
This prohibition does not apply to projects that were published before January 1, 2015.
II. - The State may conclude, on behalf of a public person mentioned in I, one of the contracts mentioned in 1° and 2° of the same I subject to the following:
1° The Ministry of Guardianship conducted the project instruction;
2° The operation is sustainable in terms of its impact on public finances and the financial situation of the public.
A decree in the Council of State specifies the conditions for the application of this II.
III. - After Article L. 1414-2 of the General Code of Territorial Communities, an article L. 1414-2-1 is inserted as follows:
"Art. L. 1414-2-1. - When they enter into a partnership contract, within the meaning of Article L. 1414-1, territorial authorities and their public institutions shall produce, for projects whose notice of public appeal to competition was published after January 1, 2016, a screening assessment, within the meaning of Article L. 1414-2, and shall forward it to the competent State services.
"The competent state departments produce a notice on the screening assessment of the project and an analysis of the overall impact of the operation on the finances of the community concerned. »
Except for its articles 17 and 20Act No. 2012-1558 of 31 December 2012 of Public Finance Programming for the years 2012 to 2017 is repealed.
This law will be enforced as a law of the State.
Annex
REPORT TO THE PROGRAMING OF PUBLIC FINANCIALS FOR 2014 YEARS To 2019
I. - The macroeconomic context.
A. - Short-term perspectives (2014-2015).
B. - The medium-term outlook (2016-2019).
II. - The budget policy proposed by the Government for the second part of the legislature.
A. - Continued fiscal consolidation.
1. Changes in revenues, expenditures and the balance of public administrations.
2. The political trajectory unchanged.
3. The evolution of the structural balance and the structural effort of public administrations.
4. Debt trajectory of public administrations (distance to stabilized balance, debt flows).
5. The European framework.
B. - Mastery of public expenditure, condition of the reduction of mandatory levies.
1. Mastering public spending.
2. The decline in the levies: the pact of responsibility and solidarity.
III. - The trajectory of public finances: subsector analysis and governance rules.
A. - State trajectory.
1. An essential contribution of the State and its agencies to the return to the balance of public finances.
2. A balanced distribution of economies that ensures the effectiveness of public action and is based on the modernization of all policies carried out by the State.
3. A three-year budget that cuts the effort of the State and its agencies but also marks the priorities of the Government.
B. - The trajectory of various central administrative bodies.
C. - The trajectory of social security administrations.
1. Mastering health insurance expenses by ensuring the quality of care.
2. Old-age insurance and family allowance expenses for each of the programming periods.
3. The expenses of the supplementary pension plans and unemployment insurance for each of the programming periods.
D. - The trajectory of local government.
E. Governance rules.
1. Cross-cutting measures to control public, preventive and corrective finances.
2. Governance measures on ODAC and state agencies.
3. Governance measures on local communities.
4. Governance measures on social security administrations.
5. Governance measures relating to tax expenditures and social niches.
6. Improving information in Parliament.
Annexes:
Annex 1: Structural effect by subsector.
Annex 2: Methodological precision for the triennial budget.
Appendix 3: Methodological and conceptual changes related to the application of new national accounting conventions.
Annex 4: Key definitions.
Annex 5: Perimeter of exceptional and temporary measures to be excluded from structural balance.
Annex 6: Table of passage between the provisions of the Organic Law on the Programming and Governance of Public Finance and the attached report.
I. Macroeconomic context
A. - Short-term perspectives (2014-2015)
After the hopes of improving the economic outlook throughout 2013, the resumption of activity in the euro area was disappointed in the first half of 2014. If the economies outside the area seem to have regained dynamic growth, including the United States and the United Kingdom, economic activity would slow down in Japan and growth would start at a slower pace than before the crisis in the major emerging economies.
The international environment of France remains marked by profound uncertainties. In the euro area, inflation is sustained at a very low level (+0.4% in August 2014), as a result of the appreciation of the euro until the beginning of 2014, of the more recent decline in oil prices, but also of the prolonged weakness of demand. The risk of deflation can therefore not be completely eliminated. The European Central Bank (ECB) has in this context recently relaxed its monetary policy again. The pace of accommodating monetary policies in the United States and the United Kingdom will also be critical, as evidenced by financial tensions in some emerging countries in 2013. The geopolitical context is also at risk: crises in Ukraine and the Middle East in particular.
French growth would be +1.0% in 2015 after + 0.4% in 2014. This growth scenario is the same as that published by the Organisation for Economic Co-operation and Development (OECD) on 15 September 2014 and slightly less favourable than that published by the Forecasts Consensus of September 2014, which forecasts + 0.5% growth in 2014 and + 1.1% growth in 2015. Inflation would increase by 0.6 per cent in 2014 and 0.9 per cent in 2015 (respectively 0.5 per cent and 0.9 per cent excluding tobacco), overall similar to the ECB's September 2014 forecast for the euro area.
This scenario incorporates a very progressive acceleration of global demand, including the low growth of the euro zone in the short term. In addition, exports are still affected by the appreciation of the euro observed between summer 2012 and spring 2014, despite its recent depreciation. Exports would accelerate gradually to + 2.8% in 2014 and to + 4.6% in 2015.
Economic activity in France would nevertheless be supported by measures taken to promote competitiveness, growth and employment. The deployment of the Competitiveness and Employment Tax Credit (CICE) and the Liability and Solidarity Pact will reduce the cost of work and allow companies to regain flexibility to hire, invest or innovate. The solidarity component favours the purchasing power of households, which is also supported by low inflation. Measures are also taken to create the conditions for a resumption of activity in the construction.
In this context, the investment of companies would start, still moderate in 2015 (+0.9%) before accelerating. Household consumption, which was still low in 2014 as a result of temporary factors (especially climate change last winter), would increase by 1.3 per cent in 2015, in connection with a more dynamic purchasing power. Employment would also increase gradually.
This forecast remains subject to many hazards. The dynamism of French exports will depend on the growth of our partners and the resolution of geopolitical risks (Russia/Ukraine in particular). The resumption of private domestic demand could be more vigorous in France if expectations were to improve, even if the available business data do not allow to exclude a longer period of atony. Finally, if the recent depreciation of the euro or the decline in the price of oil had to continue or even increase, growth could be higher in 2015. It would also be the case if the price of raw materials and especially oil was lowered.
B. - The medium-term outlook (2016-2019)
Public finance projections are based on a hypothesis of progressive acceleration of the activity, with an increase of 1.7% in 2016, 1.9% in 2017, and 2% in 2018-2019.
This projection is first of all due to the potential of economic growth to this horizon. The potential growth estimates for this Public Finance Programming Act are the estimates published by the European Commission in its spring 2014 economic forecast, dated 5 May 2014. Based on these estimates, potential growth would average 1.2 per cent per year over the 2014-2019 period. The production gap would be - 2.7% in 2013, equal to the commission's estimate for that same year.
Strong uncertainties remain on the potential of the economy beyond the recent crisis. Therefore, the conventional choice of retaining the potential growth of the European Commission is a prudent assumption: it corresponds to a downward revision between 0.3 and 0.4 points per year over the period 2014-2017 compared to the Act No. 2012-1558 of 31 December 2012 for the years 2012 to 2017. It also allows for a rapprochement with the European institutional framework. On the other hand, it presents the disadvantage of being assessed on the basis of accounts in the previous European Accounting System (SEC 95).
According to this estimate of potential growth, after a negative shock during the crisis, productivity gains would start to recover a little more important, and would contribute to the potential growth of 0.4 points per year on average. This rate would still be lower than the one before the crisis. Similarly, the investment of firms recovering, the contribution of capital accumulation to potential growth would increase slightly to 0.6 points per year at the end of the period. Despite the retirement of baby boom generations, the working population would remain dynamic and contribute to the potential growth of 0.4 points per year.
Growth assumptions for 2016 and beyond, slightly higher than the potential growth, reflect the gradual reduction of the accumulated activity deficit - greater than 3 gross domestic product (GDP) in 2015 - which would be significantly recovered from the programming horizon. This resorption of the activity deficit will nevertheless depend on the restarting of the engines of growth and the capacity of the French economy to take advantage of it.
By anticipating the return of the demand from our trading partners to its usual rate (+ 6.5% per year), exports would gradually accelerate to reach a rate of more than 6% per year from 2016.
In addition, companies would find conditions conducive to investment. Using CICE and the pact of responsibility and solidarity in part to improve their margins, companies could invest again in the face of renewed demand. Interest rates should increase with recovery, but without obstructing their ability to invest.
Household consumption would regain more vigour, at a rate of 2% at the end of the period, notably thanks to the gradual improvement of the labour market. The household savings rate should decline, especially with the dissipation of precautionary savings due to current uncertainties. However, public demand would not contribute to growth, consistent with multi-year public finance programming.
The macroeconomic scenario for multi-year programming also makes the assumption of a very progressive return of inflation to levels consistent with the target of the central bank.
The medium-term scenario, with an average growth of 1.9 per cent over 2016-2019, is close to the one selected by the International Monetary Fund in July 2014 (average of 1.8 per cent over the same period).
Main assumptions of the 2014-2019 macroeconomic scenario (*)
| GDP | 0.3 | 0.4 | 1.0 | 1.7 | 1.9 | 2.0 | 2.0 |
| GDP deflator | 0.8 | 0.8 | 0.9 | 1.4 | 1.7 | - | - |
| Tobacco Consumer Price Index | 0.7 | 0.5 | 0.9 | 1.4 | 1 3⁄4 | - | - |
| Private salary | 0.8 | 1.6 | 2.0 | 3.5 | 4.2 | - | - |
| Potential growth | 1.0 | 1.0 | 1.1 | 1.3 | 1.3 | 1.2 | 1.1 |
| Potential GDP (in Md€ 2010) | 2 110 | 2 132 | 2 156 | 2 184 | 2 212 | 2 238 | 2 264 |
| Production gap (in % of potential GDP) | - 2.7 | - 3.3 | - 3.4 | - 3.1. | - 2.5 | - 1.7 | - 0.9 |
II. - Budget policy proposed by the Government for the second part of the legislature
A. - Continued fiscal consolidation
1. Changes in revenues, expenditures and public administration balances
The Treaty on Stability, Co-ordination and Governance within the Economic and Monetary Union (TSCG) provides, in b of 1 of Article 3, that the medium-term objective (MTO) is specifically set by each country, with a lower structural deficit limit of 0.5% of potential GDP. In addition, Council Regulation (EC) No. 1466/97 of 7 July 1997 on strengthening the monitoring of budgetary positions and the monitoring and coordination of economic policies states that the WMO is reviewed every three years; However, it can be revised in the event of a structural reform that has a major impact on the sustainability of public finances.
In accordance withArticle 1 of Organic Law No. 2012-1403 December 17, relating to the programming and governance of public finances, it is up to the Financial Programming Act to establish the OMT of public administrations. TheArticle 2 of Act No. 2012-1558 of 31 December 2012 referred to above defines the OM as the structural balance.
In a context of the implementation of structural reforms aimed at sustainable improvement of the competitiveness of the French economy (in particular, the covenant of responsibility and solidarity that represents the order of 1.3 points of GDP by 2017), the Government amends the definition of the OMT of France. In addition, the adoption of new potential growth assumptions, less favourable than those of the previous programming law, also warrants an amendment to the WMO. Section 2 of this Programming Act sets it to - 0.4% of the potential GDP.
The trajectory of this Programming Act makes it clear how to return to balance public accounts in light of this new definition of the WMO.
The Government's objective is to continue the recovery of public finances that began in 2012 to reduce the share of debt in national wealth and reach the WMO in 2019.
The recovery of public finances since 2012 has resulted in a reduction in the structural deficit of approximately 2 GDP points over 2012-2013. This improvement did not find its full translation into the nominal deficit path given low growth and inflation. This degraded economic situation has thus affected the nominal balance trajectory via a deterioration of the conjuncture balance. In addition, the structural adjustment suffered from a spontaneous evolution of the mandatory sampling less than that of the activity, given a composition of the growth less favorable to the revenues. Finally, the low inflation regime has reduced the measurement of the expenditure effort, despite an increase in value spending at lower historical levels, especially in 2013 (see annex 2). In total, the public balance recovered from - 5.1 points of GDP in 2011 to - 4.1 points in 2013.
A spending mastery program, representing €50 billion in savings over the period 2015-2017, will allow the ironing deficit below the 3% threshold in 2017. In addition, this savings plan will allow for the return of budgetary manoeuvring margins to finance the reduction of mandatory levies related to the CICE and the accountability and solidarity pact.
After - 4.4% of GDP in 2014, the public balance would reach - 4.1% in 2015 given the realization of the €21 billion of savings planned, supplemented by the consideration, as part of the parliamentary discussion on the draft finance law for 2015 and the bill of rectificative finance for the end of 2014, of €3.6 million of additional adjustment measures.
The structural adjustment planned for 2014 would reach 0.4% of GDP: deducting the impact of the new national accounting rules on the treatment of tax credits, the structural adjustment is expected to 0.5% of GDP in 2015.
The balance would then be at - 3.6% of GDP in 2016, then at - 2.7% in 2017. Beyond that, the expenditure control effort will be continued and the trajectory provides for a structural effort of 0.5 points of GDP per year, allowing to reach the WMO in 2019.
The slowdown in spending will result in a public spending ratio that would increase from 56.5% of GDP in 2014 to 54.5% in 2017 (excluding tax credits). At the same time, the reduction of mandatory levies will allow the mandatory levy rate, net of tax credits, to decrease by 0.2 points of GDP between 2014 and 2017.
Public balance (expressed under national accounts conventions)
| Public balance (GDP point) | - 4.1 | - 4.4 | - 4.1 | - 3.6 | - 2.7 | - 1.7 | - 0.7 |
| Structural balance (potential GDP points) | - 2.5 | - 2.4 | - 2.1 | - 1.8 | - 1.3 | - 0.8 | - 0.2 |
| Structural adjustment | 1.1 | 0.1 | 0.4 (*) | 0.3 | 0.5 | 0.5 | 0.5 |
| (*) Deduction of the impact of the new national accounting rules on the treatment of tax credits, structural adjustment is expected to be 0.5% of GDP in 2015. | |||||||
Expenditures and revenues (expressed under national accounts conventions)
(In GDP points, unless otherwise stated)
| Public expenditure ratio (*) | 56.4 | 56.5 | 56.1 | 55.4 | 54.5 |
| Required sampling ratio (PO) | 44,7 | 44,7 | 44,7 | 44.5 | 44.5 |
| Non-contentious PO ratio | 44.8 | 44,7 | 44.8 | 44,7 | 44.5 |
| Non-mandatory income ratio (**) | 7.7 | 7.7 | 7.7 | 7.7 | 7.7 |
| Key of tax credits (key net revenue in expenditure) | - 0.1 | - 0.2 | - 0.3 | - 0.3 | - 0.2 |
| (*) Tax credits. (**) Gross revenues - PO (excluding EU PO) - tax credit revenue key. | |||||
The rate of growth of the public expenditure in value - excluding tax credits - would slow down in 2014, then again in 2015 to the benefit of the savings adopted in financial and social security laws for 2014 and 2015 and those announced from the stability program 2014-2017 to implement the savings plan of €50 million. This slowdown would also result from spontaneous developments, including local investment related to the electoral cycle, and the burden of interest on public debt. The effects of the savings plan would continue to grow in 2016, then in 2017, and that year, the expenditure would evolve at a pace close to inflation.
Public expenditure growth in value, excluding tax credits
| Public expenditure growth rate in value | 2.0 | 1.4 | 1.1 | 1.9 | 1.9 |
| Public expenditure growth rate by volume | 1.3 | 0.9 | 0.2 | 0.5* | 0.1 |
| Inflation off tobacco | 0.7 | 0.5 | 0.9 | 1.4 | 1.8 |
| (*) The year 2016 will be marked by exceptional expenditures related, in particular, to a ressurgence of the European Union's revenue collection and to the remission of debt to foreign states. | |||||
Growth of public expenditure in value by subsector
| Public administration without tax credit | 2.0 | 1.4 | 1.1 | 1.9 | 1.9 |
| Public administration including tax credits | 1.9 | 2.2 | 1.5 | 2.0 | 2.0 |
| Central public administrations, excluding tax credits | 0.5 | 0.4 | 0.1 | 0.7 | 0.4 |
| Central public administrations including tax credits | 0.3 | 2.6 | 1.2 | 1.0 | 0.8 |
| Local government | 3.4 | 1.2 | 0.5 | 1.9 | 2.0 |
| Social security agencies | 2.3 | 2.3 | 0.8 | 2.1 | 2.3 |
Trends and interest rate assumptions
Rates on the issue of French sovereign debt recorded in recent months remain at very low levels. By mid-December 2014, the average rate of short-term securities was 0.07% and the average and long-term securities were 1.31%. These levels are historically low, as a result of two main factors:
- France retains the confidence of international investors seeking quality securities to invest their liquidity in an uncertain international environment;
- the ECB's accommodative monetary policy (including exceptional long-term refinancing operations and reductions in the guiding rates, as in its September decision, to lower its main master rate to 0.05% compared to 0.15 % since June 2014).
The rate assumptions used for the years 2015 to 2017, consistent with the gradual recovery scenario for economic activity and inflation, lead to a gradual upturn in short and long rates. For example, the 10-year rate would average 1.8 per cent in 2015, followed by 2.5 per cent in 2016 and 3.2 per cent in 2017.
These rate assumptions lead to an increase in interest charges for all public administrations on the programming horizon.
Trends and interest rate assumptions
(GDP points)
| Actual balance | - 4.1 | - 4.4 | - 4.1 | - 3.6 | - 2.7 |
| Primary | - 1.9 | - 2.2 | - 1.9 | - 1.3 | - 0.2 |
| Interest charges | 2.3 | 2.2 | 2.2 | 2.3 | 2.4 |
2. The political trajectory unchanged
The spontaneous trajectory of the public balance is determined taking into account the spontaneous rate of growth in revenues and public expenditures:
- revenue side, it is based on their spontaneous evolution (related to the economic situation as well as to the historical elasticities of mandatory levies to taxable bases), the usual evolution of local tax rates (related to electoral cycles) and tax indexations. The effect of the measures already passed in all the laws before Act No. 2012-958 of 16 August 2012 for 2012 (LFR II 2012) is also taken into account, but not the new mandatory sampling measures taken after May 2012 (via LFR II 2012, the initial finance laws (LFI) as well as the financial and financial laws of the Corrigendum Social Security for 2013 and 2014, the CICE and the Pact of Responsibility and Solidarity);
- on the expense side, benefits are assumed to evolve spontaneously in relation to the usual indexing rules and demographic changes. Regular changes in local government spending, related to electoral cycles, are also included, as is the spontaneous evolution of state spending and health insurance expenditures that would be observed in the absence of spending standards. On the other hand, the savings associated with subsequent reforms in 2012, such as pension reform, the 2013 AGIRC-ARRCO agreement, the 2014 Unédic agreement, the family measures taken as a result of the public policy evaluation of the Vice-President of the High Council of the Family, Mr.Fragonard, or the savings announced as part of the stability programme voted by the National Assembly in April 2014, are not taken into account.
Projection to " unchanged policy" within the meaning of the European Directive on Budgetary Frameworks
(Percentage of GDP)
| Spontaneous trajectory (before action taken after July 2012) | - 5.6 | - 6.4 | - 7.1 | - 7.6 | - 7.4 | - 6.8 |
| Savings in expenditure | 0.4 | 0.8 | 1.4 | 2.2 | 2.9 | 3.5 |
| NDAM's inflection against its tendential evolution | 0.1 | 0.3 | 0.4 | 0.5 | 0.7 | 0.8 |
| Including inflexion on the expenses of the State | 0.3 | 0.5 | 0.9 | 1.1 | 1.4 | 1.6 |
| Other | 0.0 | 0.0 | 0.1 | 0.6 | 0.8 | 1.1 |
| PO measures (prises after May 2012, including LFI 2014 and CICE, liability pact, excluding litigation, including effect of the tax credit key) | 0.3 | 1.4 | 1.4 | 1.1 | 0.9 | 0.6 |
| Scenario with unchanged legislation and practice | - 4.9 | - 4.1 | - 4.4 | - 4.2 | - 3.7 | - 2.7 |
| PO measures announced in LFI/LFSS 2015 | 0.0 | 0.1 | 0.0 | 0.0 | ||
| Target line | - 4.9 | - 4.1 | - 4.4 | - 4.1 | - 3.6 | - 2.7 |
This report also presents a scenario with " unchanged legislation and budgetary practice", in accordance with the Directive of the Council of the European Union of 8 November 2011:
- revenue side, this scenario follows the same conventions as the spontaneous trajectory but incorporates all the new measures announced up to the rectificative financial laws of summer 2014. It thus incorporates the measures taken in LFR II 2012 and LFI 2013, as well as the reductions in mandatory levies related to the establishment of the CICE and the Pact of Responsibility and Solidarity;
- side spends, unlike the spontaneous trajectory, the scenario includes respect for the standards of expenditure for the state budget, respect for the national objective of evolution of the health insurance expenditures (ONDAM), all the savings voted before the stability program, as well as the savings in expenditure presented in the framework of the stability programme beyond compliance.
Finally, the target trajectory is that of this programming law, which includes new mandatory sampling measures in the Finance Bills (FLPs) and the Social Security Financing Bill (SSA) for the year 2015.
In total, without the measures adopted since 2012, the public balance would reach - 6.8 points of GDP in 2017 compared to - 2.7 points in the trajectory of this programming.
3. The evolution of the structural balance and the structural effort of public administrations
The evolution of the public balance is directly related to the evolution of the economic situation. Pilotage based solely on actual balance objectives would put the risk of compelled States to compensate for the smallest revenues in the phase of economic downturn, with potential pro-cyclical effects penalizing economic growth. It is therefore preferable to set evolutionary objectives in terms of structural balance, i.e., the public balance corrected for the effects of the conjuncture as well as point and temporary measures. This is the spirit of recent developments in European budgetary rules, notably the TSCG, ratified at the end of 2012. However, this measure remains imperfect: in particular, the effects of elasticity of revenues to growth, as well as the impact of low inflation are not taken into account.
After reaching 1.1 points in 2013, the structural adjustment (see box below) will be 0.1 points in 2014 for a structural effort of 0.4 points. In the first place, the accounting effects of still low inflation - 0.8% for the GDP deflator after also 0.8% in 2013 - would continue to affect the measurement of the expenditure effort, despite the economic measures that will reduce the increase in public spending, excluding tax credits, in value to only 1.4%, the lowest rate since 1998. In addition, the elasticity of mandatory levies would recover to 0.7, after 0.2 in 2013, but would remain inferior to unity, leading to that the non-discretionary component continues to influence structural adjustment. Finally, with the new accounting policies of the European System of National Accounts 2010 (SEC 2010), the rise in charge of the CICE would be accompanied by a gap between debt and budgetary disbursements in 2014 that would also affect structural adjustment (- 0.1 point).
Structural adjustment
1. Definition of structural adjustment, revenue and expenditure effort
Structural adjustment (defined as structural balance variation) is not entirely discretionary. Some elements escape the direct control of the Government and Parliament, such as the over-reactions of revenues to GDP evolution and the evolution of non-tax revenues (such as dividends). In detail, structural adjustment is broken down into a revenue effort, an expense effort, a non-discretionary component and the contribution of the key to tax credits.
The revenue effort is defined as the amount of new measures in mandatory sampling (excluding one-offs). The definition of the revenue effort is unchanged from the previous programming law. The expenditure effort is defined as the contribution of the gap between the growth of the real public expenditure (excluding tax credits, out of one-offs, out of the impact of the current on unemployment spending) and the potential growth of the economy. The definition of the expenditure effort is unchanged from the definition in the previous programming law. The non-discretionary component, excluding Government control, is defined as the effect of the shift observed between the spontaneous elasticities of the revenues and the usual elasticities to which the evolution of the non-mandatory revenues is added. The definition is unchanged from the previous programming law. The new accounting policies of SEC 2010 (see Appendix 3) add an additional term to treat tax credits. In fact, tax credits in national accounts reduce the mandatory levies of the amount of their impact on tax revenues ("budgetary"), but contribute to the public balance at the level of their debt ("recorded rights"). Therefore, in order to maintain the revenue effort unchanged and its consistency with the concept of mandatory sampling rates and new measures, as well as the other components of the above-mentioned structural adjustment, an additional term appears in this decomposition: this is the term of variation of the difference between the budget cost and the cost in national accounts of the restituable and deferable tax credits.
In addition to this new decomposition related to the 2010 SEC transition, the current methodology for calculating the structural balance differs from that used in the previous Public Finance Programming Act to two aspects developed below. For the calculation of the structural balance and as a result of the conjuncture balance, a tax-tax approach is retained, since the reaction of taxable bases to the conjuncture can be very different depending on the taxes considered: elasticities estimated at the specific production deviation for the corporate tax (IS), income tax (IR) and generalized social contribution (CSG), social contributions are mandatory and The infra box specifies the calculation in detail. The OECD updated the elasticity of mandatory sampling in the summer of 2014 (1) and the Commission announced that it would use these new estimates in the fall of 2014. The elasticities used have been revised accordingly to resume those of the OECD and are presented in the following table:
Elasticities away from production
| Income tax | 1,18 | 1.86 |
| CSG | 0.825 | 1.86 |
| Corporate tax | 1.59 | 2.76 |
| Social inclusion | 0.825 | 0.63 |
| Other mandatory samples (including VAT) | 1.00 | 1.00 |
| Unemployment | - 3.30 | - 3.23 |
Finally, in the previous programming law, it was taken into account the one-year delay in IR and IIS revenues compared to their generator fact. This delay was intended to capture the specificity of perception of these two taxes. Three reasons lead to no longer taking account of these delays in the evolution of the balance. On the one hand, it appears that these delays are in practice of a limited impact. On the other hand, this simplifies the analysis of structural balance and structural adjustment (2). Finally, this approach is similar to the methodology followed by the European Commission.
2. Method of calculating structural balance (3)
The structural balance is the balance that would be observed if the GDP was equal to its potential. It corresponds to the corrected public balance of the effects of the economic cycle and its calculation is therefore based on the difference between the actual GDP noted Y and the potential GDP noted Y*.
In terms of expenditure, only unemployment costs are assumed to be cyclical. The rest of the expenses are supposed to be structural, either because they are of a discretionary nature, or because their connection to the situation is difficult to measure. In terms of income, it is assumed that all mandatory levies (IR and CSG, IS, social dues and other mandatory levies) depend on the economic situation while the rest of the revenues (such as dividends paid to the State) is assumed to be independent of the economic position in the cycle.
For each category of mandatory R samplings, the Rs structural component can be written according to conventional q elasticity at the production gap:
You can view the image in the facsimile of the
JOno 0301 of 30/12/2014, text No. 1
The total of structural revenues is therefore obtained as the sum of structural revenues, calculated Rs (for the four categories of mandatory cyclical levies: IR and CSG, IS, social dues and other mandatory levies), combined with the rest of the revenues.
Structural spending is the difference between actual spending and structural spending related to unemployment, Dscho. These are determined in the same way as for structural revenues, depending on the conventional elasticity of unemployment costs away from production.
You can view the image in the facsimile of the
JOno 0301 of 30/12/2014, text No. 1
The difference between structural expenditures and structural revenues is structural balance Ss. Finally, the ratio of structural balance to potential GDP in value holds the GDP deflator.
The main methodological differences compared to the Spring 2014 Stability Programme are a revision of the potential growth estimate, now identical to that of the European Commission, an update of spontaneous elasticities to tax activity (identical to that of the European Commission) and, finally, a change of national accounting reference (SEC 95 to SEC 2010).
In the benchmark for the 2012 Programming Act, such as the 2014 Stability Program, the structural deficit reduction would be higher by approximately 0.4 points in 2014 and 2015:
- up to 0.25 points due to the revision of the potential growth of about 0.5 points;
- up to 0.1 points due to the change in processing of tax credits.
(Percentage of GDP)
| Structural balance SEC 2010 | - 2.5 | - 2.4 | - 2.1 |
| Structural Balance SEC 2010, excluding the impact of new tax credit treatment | - 2.5 | - 2.3 | - 1.9 |
| Structural balance SEC 95 | - 3.0 | - 2.5 | - 1.8 |
| Structural adjustment SEC 2010 | - | 0.1 | 0.4 |
| Structural adjustment SEC 2010, excluding the impact of new tax credit treatment | - | 0.2 | 0.5 |
| Structural adjustment SEC 95 | - | 0.5 | 0.8 |
Structural adjustment of public accounts will continue and will be increased over the period 2015-2017.
In 2015, the structural adjustment is expected to be 0.4% under the 2010 SEC rules and 0.5% if the impact of the 2010 SEC rules on the treatment of tax credits is deducted. This adjustment will continue at a rate of 0.3 points in 2016, and at least 0.5 points per year from 2017 to ensure the gradual return to the structural balance of public accounts.
The revision to the previous programming is the choice of a deliberately prudent potential growth. This explains an average of 0.25 points per year. In addition, the structural adjustment would be close to 0.1 points in 2014 and 2015 compared to the prevalent repository for the previous programming in connection with the change in the treatment of tax credits (see previous box).
The structural effort in expenditure would remain sustained, particularly during the period 2015-2017, as a result of the implementation of the savings plan of €50 billion, for a contribution to the structural adjustment of an average of 0.5 point per year. These savings would allow the expenditure to slow down in relation to its spontaneous evolution (usual indexing rules and anticipated volume effects for social benefits, progressive increase in interest rates starting in 2015 in line with the progressive rise of inflation and the normalization of financing conditions, and changes in the spending of local governments dependent on the electoral cycle, especially on investment).
Revenues would decrease in GDP points throughout the period, resulting in a structural effort in negative revenues. The measures of the Pact of Liability and Solidarity (lower employers' contributions, elimination of the social contribution of solidarity of companies by 2017, reduction of the normal rate of corporate tax, elimination of the exceptional contribution of ISI on large companies and measures for low- and medium-income households) and the continuation of the CICE's rise in charge would more than compensate the climate contribution energy and the increase of social contributions expected in the framework.
If, in 2015, the CICE's rise in charge would continue to weigh on structural adjustment via the key in tax credits (see previous box), just as an elasticity slightly below the unit, these factors would disappear from 2016, elasticity becoming close to the unit, allowing the structural adjustment to reach the rate of 0.5 point of GDP in 2017.
Ad hoc and temporary measures would negatively affect the public balance in 2015 and 2016, mainly due to litigation on securities pooling organizations (VSAs). The Government ' s methodology for the concept of ad hoc and temporary measures is detailed in Annex 5.
Beyond 2017 and until the TWO is reached, the structural adjustment is 0.5 point per year.
Ad hoc and temporary measures - Assumptions in Tax litigation programming
| Ad hoc and temporary measures (% of potential GDP) | 0.0 | - 0.1 | - 0.1 | 0.0 | 0.0 | 0.0 |
| Pre-payment (Md€) | 0.0 | - 0.4 | - 0.9 | 0.0 | 0.0 | 0.0 |
| Happy OPCVM (Md€) | - 0.7 | - 1.8 | - 1.8 | - 0.5 | 0.0 | 0.0 |
Change in the structural balance of public administrations
(Percentage of potential GDP)
| Change in structural balance (structural adjustment) | 1.1 | 0.1 | 0.4 | 0.3 | 0.5 | 0.5 | 0.5 |
| Structural effort | 1.2 | 0.4 | 0.6 | 0.2 | 0.3 | - | - |
| New PO measures | 1.4 | 0.1 | 0.1 | - 0.1 | - 0.2 | - | - |
| Non-tax expenditure effect | - 0.2 | 0.2 | 0.5 | 0.4 | 0.5 | - | - |
| Non-discretionary component | - 0.2 | - 0.2 | - 0.1 | 0.0 | 0.0 | - | - |
| Key tax credits | 0.0 | - 0.1 | - 0.1 | 0.0 | 0.1 | - | - |
Evolution of the structural effort of public administrations and detail by subsector
(Percentage of potential GDP)
| Structural effect | 1.2 | 0.4 | 0.6 | 0.2 | 0.3 |
| Central public administrations | 0.9 | 0.2 | 0.3 | 0.2 | 0.2 |
| Local government | - 0.2 | 0.1 | 0.3 | 0.1 | 0.2 |
| Social security administrations | 0.5 | 0.1 | 0.0 | -0.1 | 0.0 |
The consequences of low inflation on public account recovery
Inflation has declined sharply since the summer of 2012 and has now reached a very low level, in France and in the Eurozone: the growth rate of the Off Tobacco Price Index (IPCHT) would be only 0.5% in 2014 and would be at 0.9% in 2015. This low inflation context penalizes public account recovery and makes structural adjustment more difficult.
In fact, low inflation results in a less rapid increase in public revenues due to the slowdown in taxable bases in value. For example, lower inflation reduces household consumption in value, which weighs on tax revenues on value added (VAT) as well as on the tax profit of businesses and therefore, in fine, on corporate tax revenues. Conversely, public spending does not adjust as mechanically to the decline of inflation: the impact is partial and produces its effects with delay. The decline in inflation thus remains without effect on benefits that have been frozen as part of the Corrigendum Financial Act. It is also without effect on the remuneration of civil servants due to the freezing of the public service point. These two masses represent almost half of the public expenditure. For other expenses, if some are reduced (such as interest charges on indexed bonds or some operating expenses), projects that fall within the framework of multi-yearly planned transactions, some purchases disconnected from the General Price Index or certain benefits that may be deferred from inflation do not evolve directly as the Price Index.
In the end, in a context of low inflation, it is more difficult, all things equal, to correct the public balance. Low inflation thus leads to a reduction in expenditure, with the lowest improvement in the nominal deficit being recognized as structural.
4. Debt trajectory of public administrations (debt to stabilized balance, debt flows)
Continued efforts to reduce the deficit associated with a higher growth rate of activity will lead to a drop in the debt ratio starting in 2017 (97.0 points of GDP after a peak at 97.7 points in 2016 - or 94.0 points in 2017 after 94.7 points in 2016 excluding financial support to the euro area). This rate of progression would mainly result from the mechanical effects of the deficit on increasing debt (4).
Public debt trajectory of public administrations and subsector detail
(GDP points)
| Debt ratio in the direction of Maastricht | 92.2 | 95.2 | 97.1 | 97.7 | 97.0 | 95.1 | 92.4 |
| Debt ratio excluding financial support to the euro area | 89.2 | 92.0 | 94.0 | 94,7 | 94.0 | 92.3 | 89.6 |
| United Nations | 73.6 | 76.0 | 77,9 | 78,8 | 78,6 | - | - |
| Dont ASSO | 10.0 | 10.3 | 10.4 | 10.1 | 9.4 | - | - |
| UNMIL | 8.6 | 8.8 | 8.9 | 8.9 | 8.9 | - | - |
The difference to the stabilizer balance, the debt flow and the change in the debt ratio
| nominal GDP growth (%) | 1.1 | 1.2 | 1.9 | 3.1 | 3.6 | 3.7 | 3.7 |
| Stabilizing balance | 3.2 | 3.3 | 2.3 | 0.7 | -0.7 | -1.8 | 7 |
| Actual public balance | - 4.1 | - 4.4 | - 4.1 | - 3.6 | - 2.7 | - 1.7 | - 0.7 |
| Balance stabilizing the debt ratio | - 1.0 | - 1.1 | - 1.8 | - 2.9 | - 3.4 | - 3.5. | - 3.4 |
| Debt flows | - 0.2 | - 0.3 | - 0.4 | - 0.1 | - 0.1 | - 0.1 | 0.0 |
| Financial support to the euro area | 0.7 | 0.3 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Variation in the debt ratio | 3.0 | 3.0 | 1.9 | 0.6 | - 0.8 | - 1.9 | 7 |
After a significant increase in debt due to France's financial support to its Eurozone partners between 2010 and 2013, loans to Greece and Portugal - bilateral loans and loans via the European Fund for Financial Stabilization (FESF) (5) - as well as the financing of allocations to the European Stability Mechanism (MES) would no longer contribute to a 0.3 point increase in the debt ratio in 2014. From 2015 and the rest of the period, the increase in debt due to financial support to the euro zone would be zero.
Financial support to the euro area
(In billions of euros)
| Debt in the sense of Maastricht (cumul) | 4.4 | 144.5 | 48.1 | 62,9 | 68,6 |
| Greece (bilateral loans) | 4.4 | 11.4 | 11.4 | 11.4 | 11.4 |
| Dont Greece via FESF | 23.6 | 29.2 | 31.4 | ||
| Dont Ireland via FESF | 1.6 | 2.6 | 3.8 | 3.8 | |
| Dont Portugal via FESF | 1.5 | 4.0 | 5.4 | 5.7 | |
| Endowment to the capital of ESM | 6.5 | 13.0 | 16.3 |
5. The European framework
The last recommendation of the Council of the European Union under the excessive deficit procedure was adopted on 21 June 2013. It requires a structural adjustment of 1.3 points in 2013, then 0.8 points in 2014 and 2015, or, within the meaning of the effort in terms of the volume of measurements or "bottom-up" (6), an effort of 1.5 points in 2013, then 1.0 points in 2014 and 2015.
The nominal balance trajectory underlying the recommendation was - 3.9% of GDP in 2013, and - 3.6% of GDP in 2014 and - 2.8% in 2015, under the basic assumption of growth of - 0.1% in 2013 and 1.1% in 2014 and inflation of 1.2% in 2013 and 1.7% in 2014.
In March 2014, the European Commission stated in an autonomous recommendation that France should take the necessary steps to respect its trajectory. In July 2014, the Council of the European Union estimated in the recommendation to France for the European semester on the proposal of the European Commission that the programme of stability of France could be considered globally in line with this autonomous recommendation of the Commission. It also recommended that France make additional efforts in the Corrigendum Finance Act for 2014. In the summer, Parliament passed an LFR and a Social Security Rectificative Financing Act (SSRF) detailing savings measures for 2014.
Finally, the recommendation for the European semester of 8 July 2014 indicated, inter alia, that France should " ensure that the reduction of labour costs resulting from the competitiveness and employment tax credit is maintained; [...] take steps to further reduce employers' social contributions in accordance with the commitments made under the Pact of Responsibility and Solidarity, ensuring that no other measure cancels their effects and that the targeting currently envisaged is retained".
The macroeconomic context, however, deteriorated sharply in the course of 2014, reflecting a strong downward revision of growth and inflation prospects. In this context, the European Council concluded in June 2014 that "it is necessary to take advantage of the possibilities offered by the current EU budget framework to reconcile fiscal discipline and the need to support growth [...]. Structural reforms that promote growth and improve the viability of public finances should be given special attention, including by an appropriate assessment of budgetary measures and structural reforms, making the best use of the flexibility offered by the current rules of the Stability and Growth Pact, and then called on August 30, "to make rapid progress in implementing these directions".
In October 2014, France presented a PLF and a PLFSS for 2015, which were reviewed by the European Commission in accordance with Regulation (EU) No 473/2013 of the European Parliament and the Council of 21 May 2013 establishing common provisions for the monitoring and evaluation of the draft budget plans and for the correction of excessive deficits in the member states of the euro zone. At the end of October 2014, the Commission concluded that the draft budget plan for France for 2015 did not present "particularly serious breaches" to the provisions of the Stability and Growth Pact, which aims to guarantee healthy public finances in the European Union. However, on 28 November, on the basis of its revised growth forecasts published in early November, the Commission stated that, in view of the risk of non-compliance with the European rules contained in the draft budget plan for France for 2015, taking into account the elements known at that date, a further review of its financial situation would be carried out at the beginning of March 2015, in particular in light of the final version of its financial statements for the year 2015.
B. - Mastery of public expenditure, condition of the reduction of mandatory levies
Since the beginning of the legislature, the Government has been conducting a public finance policy. With a total structural adjustment of 2 GDP points in 2012 and 2013, public finances have improved significantly since 2012.
Given the budgetary imbalances observed at the beginning of the legislature - the public deficit was still 5.1 per cent of GDP in 2011 - and the existing risks on the terms of funding, mandatory, quick-impact measures were initially needed. These measures have led to the consolidation of public finances, calling for a more important effort for the wealthiest households.
At the same time, expenditures were strictly controlled in 2012 and 2013 with a public expenditure growth rate, excluding tax credit, of 2.0 per cent in value in 2013. As the Public Finance Programming Act for the years 2012 to 2017 provided, the recovery of public finances is now based on savings in expenditure, after mobilising these levies.
The construction of the financial bill for 2014 was thus a priority on a slowdown in spending, with nearly €15 billion in savings on the state and its agencies, territorial authorities and social regimes compared to their spontaneous progress. This effort was increased in the summer by the financial and social security finance laws.
It will be continued over the period 2015-2017, with the aim of achieving €50 billion in savings on public spending. These savings are necessary to continue the remediation of public accounts and to finance the reduction of mandatory levies resulting from the creation of the CICE and the accountability and solidarity pact. The decrease in corporate levies is intended to give them the means to hire, train their employees and invest to modernize their production tool. It will rise to over €40 billion, which will allow them to reconstitute the margins they have lost since 2008. This reduction is accompanied by solidarity measures to support the purchasing power of households, in 2014 with the exceptional reduction of income tax provided by the rectificative finance law of August 8, 2014, which is amplified and sustained in 2015.
All public expenditure actors will be mobilized for the realization of the €50 billion of savings: the state, its agencies, the local authorities and the social security administrations will each contribute to the effort to restore public finances, in proportion to their respective share in the total public expenditure. These economies are designed to limit their cost to growth and preserve future spending for the country, a factor for future growth. Savings to improve the effectiveness of public action, such as the reform of aid to businesses, or the increased use of outpatient surgery and generic medicines in the health sector, are thus privileged.
1. Mastery of public expenditure
(i) A master's degree in spending since 2012...
The Government proposes to continue the remediation of public finances based exclusively on expenditure savings. Such a path is an indispensable condition for the relief of sampling. It is also consistent with the desire to ensure that contributions to the public power are used in the most effective way possible.
Public expenditure control is a priority of the Government ' s budgetary policy. Thus, in 2012, the expenses of the State, including debt and pensions, decreased by €0.3 billion and the NDAM was under-executed by €1 million. In 2013, the dynamics of public spending slowed, from a change of + 3.0% in 2012 to + 2.0% in 2013 (in value and excluding tax credits), notably thanks to a strict control of expenditures under standards: the state-value standard was under-executed by €0.1 million and the NDAM of €1.7 million.
For 2014, €15 billion in spending savings were presented at the PLF. A new set of measures, in full on public spending, has been implemented by the summer's rectificative financial laws, to begin the resorption of the "significant gap" within the meaning of the Organic Law on Public Finance Programming and Governance, found in 2013.
All public administrations contribute to the economies: thus, territorial authorities are encouraged to slow down the growth of their operating expenses through a decrease of €1.5 billion in their financial competitions. The state-value expenditure standard has been further reduced to the Corrigendum Financial Act for 2014, up to €1.6 million, excluding financial competitions to territorial authorities. The expenditures under standard would therefore decrease by € 3.2 million compared to the 2013 execution. State agencies have been made available through the general budget grants, but also by the decrease in their taxes and the mobilization of exceptional contributions for certain categories of actors (Centre national de la cinématographie et de l'image animée [CNC], water agencies and chambers of commerce and industry [CCI] in particular). Social security administrations also contribute to the savings, through the continued control of health insurance expenditures, with the lowest growth rate of the NDAM provided for in a Social Security Financing Bill since 1998 (2.4%), the reform of family policy and the consolidation of the pension system, both for basic pensions in the context of pension reform and for supplementary pensions following the decisions of social partners the control of expenses
All of these measures will allow for a further reduction in public spending to +1.4% in 2014 (in value and excluding tax credits).
(ii) That will be amplified on the entire quinquennium.
As of 2015, the recovery will be carried exclusively by expenditure measures.
The total objective of €50 billion of savings will be fully implemented.
A first effort of €21 billion will be made in 2015, which will reduce the growth rate of public spending to 1.1% (in value, excluding tax credit now booked as expenses). Savings will continue in 2016, reaching a total of €36 billion, and €50 billion will be reached by 2017. Thanks to these efforts, the rate of growth in public spending will be 1.9 per cent in value in 2016 and 2017, a very much lower level than that of nominal GDP growth in this horizon (+ 3.4 per cent on average).
The state and its agencies will assume a total net economy of €19.3 billion, of which €8 billion of economy in the first year. This effort makes it possible to compensate for the spontaneous evolution of the expenditure and to continue the decrease in current euros of the appropriations of the departments and the taxes allocated to the agencies that will experience a reduction of €2.1 billion as of 2015 and €2.5 billion by 2017, a trend inverse to that which prevailed before 2012. Savings were balanced in order to ensure the effectiveness of public action and to ensure the financing of government priorities. The progression of remuneration will thus be strictly controlled, in connection with the stabilization of the public service point. Job creations for national education, research, security and justice will be offset by job reductions in other jurisdictions. The improvement of the productivity of the administrations, which includes the simplification of the administrative rules, the modernization of the State's support functions in particular with regard to purchases, real estate and computing, the evolution of the territorial organization of the State and the increased dematerialization of the exchanges with the users will continue the reduction of the operating expenses of the State. Agencies, whose spending has grown much faster than those of the State over the past few years, will take their full part in the recovery efforts, especially through better control of their revenues. The use of these resources will thus be subject to stricter supervision by the rules set out in section 16 of this Programming Act and their total level will be reduced by €1.1 billion as of 2015. The financial bills for 2015 and 2016 will detail all of the targeted reforms that will be implemented on each sector, in particular with respect to intervention costs: the impact of all of these measures is reflected in the programming of the means allocated to each detailed budget mission in section 13 of this Programming Act.
The state's budgetary allocations to the territorial authorities will decrease in current euros by €10.7 billion by 2017. This effort reduces the growth of all territorial communities' resources to a rate close to inflation over the next three years.
Thus, the resources and expenditures of the territorial authorities will continue to progress, but at a lower rate than that of the past three years.
This effort will be accompanied by a substantial strengthening of equalization. Thus, the National Fund for Equalization of Intercommunal and Municipal Resources (FPIC) will increase by € 210 million between 2014 and 2015, an increase of over 36 per cent. The rate of progress of vertical equalization endowments, included in the overall operating staffing, will increase by €327 million compared to 2014. Thanks to these efforts, the impact of the decline in the state's financial competitions will be modulated according to the wealth of the community concerned. For example, the per capita contribution of municipalities with the highest resources will be seven times stronger than the most difficult municipalities.
In addition, sections 11 and 30 of this Programming Act propose to establish an indicative objective of changes in local spending. This objective will apply to the perimeter of the total expenditure, excluding amortization of the debt, the amount for the year 2013 is €220.8 million (7). Established as of 2015, it will share, between the State and territorial authorities, an objective measurement tool for the trajectory of local spending. It will be, starting in 2016, refined by category of territorial authorities.
The implementation of the National Health Strategy (NSS) will enable more than €10 million in savings on health insurance, which is in fact a 2 per cent annual average increase in NDAM between 2015 and 2017. A first effort of more than 3 Md€ will be made in 2015 with a progression of ONDAM slowed to 2.1%.
Non-health insurance expenses will contribute to the control of public spending up to €10 million, of which €6 million for the year 2015. An important part of these savings, for nearly €4 billion as of 2015, actually correspond to the impact of measures already decided (e.g., unemployment insurance agreement in the first half of 2014; pension reform; reform of family policy). A set of complementary measures will be detailed in the next PLFSS (e.g., the continuation of family policy reform; efforts on the management of social benefits; control of expenditures by managed plans parity).
Finally, beyond the measures already planned, the creation of an expenditure review, provided for in section 22 of this programming law, will modernize the budgetary procedure so as to give Parliament and the Government new avenues for structural reforms. This review, implemented annually, will provide a complete analysis of public spending and interventions, which will be taken into account during the budget construction process. These reviews, which will also focus on tax expenditures and, in particular, on tax credits, will provide an aggregate vision of the means dedicated to public policy.
2. The reduction of the levies: the pact of responsibility and solidarity
During the programming period, the mandatory sampling rate would decrease to 44.5 per cent of GDP in 2017, compared to 44.7 per cent in 2014. This decline would be mainly driven by the rise in the CICE and the establishment of the Pact of Responsibility and Solidarity.
Announced by the President of the Republic on 14 January 2014, the Pact of Responsibility and Solidarity is participating in the reduction of mandatory levies over the period 2014-2017. The measures for 2014 and 2015 were voted in LFR and LFRSS in the summer of 2014. All the measures of the pact will be progressively implemented with the aim of promoting employment, supporting productive investment capacity and the competitiveness of enterprises, and making mandatory levies more progressive, for the benefit of medium and modest households. The decrease in mandatory levies under the pact will reach more than €26 billion by 2017, almost €10 million from 2015. By adding the CICE effects, the total decrease will be over €40 billion by 2017.
The objective of the pact is, together with the CICE, to restore the competitiveness of enterprises, achieved by ten years of continuous erosion (cf. Gallois report, November 2012), while at the same time starting the decline in the levies on low- and medium-income households and renovating the employment support system for employees close to the minimum interprofessional growth wage (SMIC) (8).
An increase in the cost of work, already initiated by the establishment of the CICE. In 2015, the cost of work at the SMIC level will be reduced by the complete exemption of contributions to social security and family allowances (SSAF) unions by employers as part of a strengthening of existing allowances, as well as a decrease of 1.8 points in family allowances for salaries up to 1.6 times the SMIC. In addition, the level of relief is harmonized for all companies, regardless of their size. As of January 1, 2016, the decrease in family allowance contributions will be extended to wages below or equal to 3.5 times the CIMS. These contributions will also be reduced for independent workers. These reliefs, which will rise to about €11 billion by 2017, meet a double objective: to promote job creation and support production and investment.
Modernization and reduction of corporate tax. The C3S, paid by approximately 300,000 companies, will be deleted by 2017. A first reduction equivalent to €1 billion will be in the form of a slaughter that will allow two-thirds of the subservients, small and medium-sized enterprises (SMEs), to no longer pay the C3S. In total, this deletion represents the order of €6 billion by 2017 that will be returned to businesses. The outstanding contribution on corporate tax will also be eliminated in 2016, which represents a decrease in taxation of more than €2.5 million. In addition, the nominal IS rate will rise from 33.3% currently to 28% in 2020, with a first step in 2017.
Measures for middle- and low-income households. The pact provides favourable measures for the purchasing power of the most modest revenues. Income tax reductions, targeted at households close to the ICMS, were introduced in 2014; they would represent €3 billion from 2015. These measures will be complemented by the merger of the Employment and Active Solidarity Income (ESA) premium.
New measures in mandatory sampling
The concept of mandatory sampling is set out in the annex to this report. New measures within the meaning of the meter of this Programming Act are the legislative or regulatory action taken since the beginning of the quinquennium that has an impact on the programming period. The table also distinguishes the impact of litigation, taking into account the significant disbursements planned for this period. Other new measures include both the new measures adopted in financial and social security financing laws prior to July 1, 2012, as well as the measures decided by other public administrations.
New measures (NM) in mandatory sampling
(In billions of euros)
| New measures in mandatory sampling | 3 | 0 | - 4 | - 3 |
| Including new measures within the meaning of section 18 of this Programming Law (excluding competitiveness) (*) | 0 | 4 | 2 | - 1 |
| Competitiveness (**) | 0 | - 7 | - 8 | - 6 |
| Litigation | 0 | - 1 | 0 | 2 |
| Other | 3 | 4 | 3 | 2 |
| Elasticity of mandatory sampling (except EU) | 0.7 | 0.9 | 1.0 | 1.0 |
| (*) By summing up the New Measures line within the meaning of Article 18 out of Competitiveness and the Competitiveness line, all new measures are obtained within the meaning of section 18 of this Programming Law. (**) Competitively, the responsibility and solidarity component of the Covenant is understood. | ||||
New measures within the meaning of this Programming Law
As provided for in section 18 of this Programming Law, the impact of mandatory sampling measures, adopted by Parliament or taken by the Government by regulation as of 1 July 2012, cannot be less than the following amounts, expressed in billions of euros:
(In billions of euros)
| 0 | - 2 | - 6 | - 8 |
Over the period 2014-2017, the meter is comprised of measures voted in the financial laws subsequent to LFR II 2012, presented in PLF 2015 and PLFSS 2015. It also takes into account the measures of the Pact of Responsibility and Solidarity, some of which have already been voted in LFR 2014 and LFRSS 2014.
III. - The trajectory of public finances: subsector analysis and governance rules
During the programming period, the actual and structural balances of public administrations are as follows:
Subsector breakdown of actual and structural balances of public administration
(In potential GDP points, unless otherwise stated)
| APU | Actual balance (GDP points) | - 4.1 | - 4.4 | - 4.1 | - 3.6 | - 2.7 | - 1.7 | - 0.7 |
| Structural balance | - 2.5 | - 2.4 | - 2.1 | - 1.8 | - 1.3 | - 0.8 | - 0.2 | |
| UNCT | Actual balance (GDP points) | - 3.2 | - 3.6 | - 3.6 | - 3.3 | - 2.7 | - | - |
| Structural balance | - 2.5 | - 2.7 | - 2.7 | - 2.5 | - 2.1 | - | - | |
| ASSO | Actual balance (GDP points) | - 0.5 | - 0.5 | - 0.3 | 0.0 | 0.3 | - | - |
| Structural balance | 0.2 | 0.4 | 0.6 | 0.8 | 0.9 | - | - | |
| APUL | Actual balance (GDP points) | - 0.4 | - 0.3 | - 0.2 | - 0.3 | - 0.3 | - | - |
| Structural balance | - 0.2 | - 0.1 | 0.0 | - 0.1 | - 0.1 | - | - |
A. - State trajectory
During the programming period, the budgetary balance would be as follows:
Expenditures/Receivables/Fiscal Sold/ Actual Sold
| Balance in national accounts (in Md€) | - 69.2 | - 75.9 | - 77.0 | - 73.9 | - 61.6 |
| National Accounts Balance (GDP points) | - 3.3 | - 3.6 | - 3.5. | - 3.3 | - 2.6 |
| Expenditures (in GDP points) | 21.5 | 21.7 | 21,4 | 20.9 | 20.3 |
| Income (GDP points) | 18.2 | 18.2 | 17,9 | 17.6 | 17.6 |
| Budgetary balance (in Md€) | - 74.9 | - 88.1 | - 74.5 | - 70.0 | - 59.9 |
After having been highly positive in 2013 and 2014 (5.7 Md€ and 12.2 Md€), the key to passing between the state's budgetary balance and the state's balance in national accounts would be negative over the period 2015-2017 (- 2.5 Md€ in 2015 and - 3.9 Md€ in 2016, before recovering to - 1.7 Md€ in 2017).
In 2013 and 2014, several operations carried out in the framework of aid to the countries of the euro zone (supplies to the European stability mechanism [MES] in particular: €6.5 billion in 2013 and €3.3 million in 2014) contribute positively to the key. In fact, these transactions correspond to budgetary accounting expenditures, but are considered to be neutral financial transactions on the public balance in national compatibility as they do not lead to a financial impoverishment of the State. The same applies to non-expendable (capital) allocations made by the State in favour of certain operators under the second part of the future investment programme (IPA) in 2014 (€4.7 billion).
Over the programming period, the CICE would explain a negative contribution to the key. With the new accounting policies of the SEC 2010, tax credits are now considered as expenditure, and are accounted for in the public balance for the amount of the debt ("referred fees") and not their budgetary cost. As a result of its upsurge and reimbursement rules, the budget cost for the CICE public administrations is lower than the value of the debt at the beginning of the period, which explains a negative contribution to the key. This effect fades gradually, once the permanent regime reaches.
Apart from this contribution of tax credits to the key, the level of the key reflects essentially the fees corrections found on the charge of the debt (primes and denominations on the issue and non-due accrued interest), which improve the public balance in national accounts over the entire period. The issuance of securities on older strains leads to a gap between the emission value and the repayment value of the securities. Since interest rates are currently low, interest rates on older strains are higher than market rates, which leads to a positive difference between emission and refund values. This results in a cash gain, not recorded in budgetary revenues, which is spread to national accounts over the period of the loan. With the gradual rise of rates and the exhaustion of the stock of obligations concerned, this effect would be less in the end of the period but would remain positive.
Public-private partnerships (PPPs) are registered in national accounts at the time of delivery and not as the associated rents are paid. The latter would contribute on average, starting in 2016, to a little less than - €0.5 million per year. Military expenditures, which are also recorded at the time of delivery in national accounts, would also contribute to the key, starting in 2016, at an average of - €0.5 million per year.
Finally, a fraction of the IAP expenditures is directly attached to the State in national accounts (in particular those carried out by the Fund of Deposits and Consignations [CDC] with a negative effect on the programming period. In addition, since the implementation of the 2010 SEC, the National Housing Assistance Fund (FNAL), the National Active Solidarity Fund (FNSA) and the National Agricultural Risk Management Fund (FNGRA) are attached to the State in national accounts, their balance is therefore integrated into the key, for a virtually zero amount.
State transit key
(In billions of euros)
| National accounts balance | - 69.2 | - 75.9 | - 77.0 | - 73.9 | - 61.6 |
| Budgetary balance | - 74.9 | - 88.1 | - 74.5 | - 70.0 | - 59.9 |
| Associated key | 5.7 | 12.2 | - 2.6 | - 3.9 | - 1.7 |
| including key tax credits | - 1.6 | - 4.5 | - 7.0 | - 7.2 | - 4.8 |
| Key, excluding tax credits | 7.3 | 16,7 | 4.4 | 3.3 | 3.1 |
Significant financial commitments of the State having no immediate involvement on the structural balance
The significant financial commitments of the State having a potential impact on its financial situation are, pursuant to standard 13 of the compendium of the State's accounting standards, annexed to the general account of the State and thus form part of the scope of certification of the Court of Auditors. They represent either potential obligations of the State with respect to third parties, or obligations some do not necessarily involve a resource outflow. The main commitments of the State are, at the closing date of the 2013 accounts, the following:
- State pension commitments to civil and military officials, which are valued at €1,302 billion as at December 31, 2013 (with an discount rate of 1.08 per cent), mainly for retired officers (67 per cent). The annual funding of these commitments is approximately €50 billion per year for the years to come;
- the guarantee, for 416 Md€, of the total amount of regulated savings deposits: booklets A, blue and sustainable development (367 Md€) and popular savings booklet (48 Md€);
- commitments arising from the mission of the economic and social regulator of the State, for a total amount of 363 Md€. Within this set, which covers the potential obligations of the State corresponding to transfers for which all the conditions necessary for the constitution of the beneficiary's right are not realized at the closing date or must be maintained on subsequent periods. This is mainly the need for estimated funding of subsidized special pension plans (SNCF, RATP, ENIM [9], SEITA [10] and CANSSM [11]) for 200 Md€ and housing aid commitments (106 Md€);
- the debt guaranteed by the State under the conditions fixed by theArticle 34 of Organic Law No. 2001-692 of 1 August 2001 Financial legislation, for a total amount of €203 million, of which 99% is concentrated on eight beneficiaries, the main being the European Financial Stability Fund (€70.4 million);
- Liabilities (179 Md€), consisting mainly of the remaining callable capital of ESM for France (126 Md€, to be compared to 16.3 Md€ called and paid out on 2012-2014) and of capital appealable by various multilateral banks and EU institutions, including the EIB (35 Md€). These commitments cover potential failures to receive loans from these institutions;
- insurance mechanisms under export support (€102 billion). In particular, the State is committed to the credit insurance of COFACE, which consists of covering exporters against the risk of interruption of their contract, and banks against the risk of non-reimbursement of export credits to a public or private buyer.
1. An essential contribution of the State and its agencies to the return to the balance of public finances
The 2015-2017 triennial budget represents the concrete decline in the contribution of the state and its agencies to the return to the balance of public finances. A total volume of €19.3 billion in savings will be achieved by 2017 (excluding reductions in allocations to territorial authorities): €18.8 million in savings on the appropriations of departments and the resources allocated to the agencies to which €0.5 million is added on future investments related to a forecast of stabilization of the disbursement rate of operators of this program, a less rapid increase than that anticipated in previous forecasts.
The €18.8 million of savings on the triennial of savings on the appropriations of departments and the resources allocated to the agencies make it possible to compensate for the spontaneous increase of expenditures, which amounts to €17.5 million between 2014 and 2017 (€5.8 million per year [12]), and to continue the decrease in current euros of the appropriations of the departments and the taxes allocated to the agencies initiated since the beginning of the quinquenquennium, the trend that preceded by 2012.
The tendential evolution of State spending
The tendential evolution of non-debt spending, pensions and transfers to local authorities and the European Union, is broken down as follows, for a total of €5.4 million per year:
- €1.9 billion of payroll, taking into account a revalorization of the public service point at the level of the average inflation forecast for the period 2015-2017 (1.35 per cent) and of class and various measures up to €0.5 million;
- 0.5 Md€ of operation and 0.5 Md€ of investment, which corresponds to the tendancial estimated by the Court of Auditors, and holds differentiated changes by type of expenditure (budget workers, current operation, military equipment expenses, etc.);
- €0.8 billion in contributions to operators, for which tendancial evolution is estimated according to the same assumptions as the State by nature of expenditure (personal, operation, investment, interventions);
- €1.7 billion of interventions, including "window" expenses, automatically paid as the recipient meets conditions defined by legislation or regulations, and "off-spot" interventions, for which the level of expenditure can be piloted in a discretionary manner by departments.
Taking into account the evolution of transfers to the European Union, for an amount equivalent to the forecasting expenditure, results in a differentiated trend according to the years: €5.9 million in 2015, €7.5 million in 2016 and €4 million in 2017, an average of €5.8 million annually. This figure is lower than the one introduced in the financial bill for the year 2014 (7 Md€). It was reviewed this year to take into account:
- the exclusion of the range of transfers to local authorities, for €0.5 million, taking into account the specific follow-up they are subject to;
- taking into account the forecasting chronicle of revenue sampling for the benefit of the European Union (SRP-EU), which presents a significant ressurgence in 2016 when the new clean resource decision comes into force (0.4 Md€ on average annually over the triennium); In view of this recurrence, the tendancial takes into account the actual disbursement column and not the previous annual average;
- a decrease in the wage mass forecast (- €0.3 million) related, in particular, to the consideration of average inflation over the triennium (1.35 per cent), instead of average inflation;
- alignment of the investment forecast with those of the Court of Auditors (- €0.2 million);
- an increase in the operator's tendancial, taking into account, among other things, a revision of the attitude considered, including subsidies for public service charges as well as the affected taxes capped.
The non-debt, out of pensions and out of transfers to the local authorities will be reduced by €1.5 billion in 2015, will increase by € 1.8 million in 2016 given the exceptional resssaut of the SSR-EU and will then decrease by €1.5 million in 2017 compared to the previous year.
Based on this standard and the trend described above, the total effort is therefore broken down in €7.5 million in 2015, €5.7 billion in 2016 and €5.6 million in 2017, or €18.8 million over the period. These amounts take into account the effort of €0.25 billion implemented during parliamentary debate for the 2015 finance bill, bringing the state savings of €7.2 million to €7.5 billion in order to compensate for the measures taken in favour of the communities decided in this debate, which result in a reduction of the savings on this subsector.
The evolution of State spending on a broader perimeter, excluding debt burdens, excluding pensions but integrating transfers to territorial authorities and the European Union, further reflects the Government's determination and ability to control the dynamics of public spending over the long term. Expenditures had increased by almost €8 billion between 2007 and 2011 on this perimeter and the previous Public Finance Programming Act assigned them a stability objective in common euros. The measures taken by the Government will result in a decrease of more than €13 billion in current euros of these expenditures on the quinquennium, a decrease of 5%. If, for 2012 and 2013, budget construction has been based on stabilization in terms of these expenditures, they are now declining since 2014. Thus, after a first decrease in spending on this field introduced by the Financial Law for 2014 (- €1.7 million compared to the FIA 2012), this decrease will continue and will increase until an additional decrease of €11.5 billion in current euros to 2017 compared to the level of the FIA 2014, the efforts made by local authorities in addition to those of the State and agencies.
Please note, the lowest decrease in spending between 2015 and 2016, caught up in the following year, is due to the exceptional resssaut of the revenue levy for the benefit of the European Union (+€ 1.8 million compared to 2015).
Evolution of State spending
(In payment credits [CP] and billions of euros, in PLF 2015 format)
| General budget expenditures (excluding debt, pensions and RCT) | 204.22 | 203.24 | 203.00 | 202.46 |
| Affected taxes and exceptional sampling | 6.20 | 5.12 | 5.09 | 5.46 |
| Total Departmental Expenditures and Receipts | 210.42 | 208.35 | 208.09 | 207.91 |
| Variance in 2014 | - 2,06 | - 2.33 | - 2.50 | |
| Excerpts on income for the benefit of the European Union | 20.22 | 20,74 | 22.80 | 21,48 |
| Total State expenditures, excluding debt, pensions, community holdings and outstanding levies | 230.64 | 229.10 | 230.89 | 229.39 |
| Variance in 2014 | - 1.55 | 0.25 | - 1.25 | |
| Transfers to local authorities (SRP and RCT* mission) | 56.87 | 53.45 | 49.79 | 46.12 |
| Variance in 2014 | - 3.42 | - 7,09 | - 10.75 | |
| Working capital allowances under the Financial Law for 2014 | - 0.48 | |||
| Total State expenditures, excluding debt charges and pensions | 287,04 | 282.55 | 280.68 | 275,52 |
| Variance in 2014 | - 4.49 | - 6.35 | - 11,52 | |
| Debt charge | 46,65 | 44,34 | 47,34 | 49.51 |
| Contributions to CAS Pensions | 45.44 | 45.80 | 46.19 | 48,40 |
| Total State spending, excluding the European Stability Mechanism and Second Future Investment Programme | 379.13 | 372,68 | 374,22 | 373.43 |
| (*) Except for parliamentary reserve, reinstated to general budget expenditures. | ||||
2. A balanced distribution of economies that ensure the effectiveness of public action and is based on the modernization of all policies led by the State
All government departments and agencies funded by the state are associated with the effort to restore public accounts.
The evolution of the payroll, which accounts for more than 40% of departmental spending, is controlled and will increase much faster than inflation: the average annual change is thus limited to 0.3% over the period 2014-2017.
The progression of remuneration will thus be strictly controlled by the stabilization of the public service point and the reduction of the category envelopes. While the category measures resulted in an average increase in payroll costs of €500 million per year between 2007 and 2012, these measures are reduced to €177 million per year over the period 2015-2017 and are primarily earmarked for the services being reorganised.
In addition, in accordance with the commitment of the President of the Republic, the number of the state and all its operators will be stabilized on the quinquennium. This stabilization will be achieved at the end of the period, for the whole constituted by the State and its operators, whose employment ceiling is fixed in the financial laws of the year.
Job creations in the priority sectors (education, justice, security, employment) will thus be offset by reductions in the other sectors: the average rate of effort for the period 2015-2017 will be 2% for the latter. These reductions will result from productivity gains related to the development of digital administration, the optimization of the territorial organization of the State, the increased mutualization of support functions and, in the particular case of the Ministry of Defence, the evolutions of staff consistent with the objectives of the Military Programming Act. This stabilization of the workforce will help to control the payroll, both from the state and the operators.
Evolution of the state workforce
| State | 4 278 | - 2 317 | - 3 180 | - 1 177 |
| Education | 4 278 | 8 981 | 8 954 | 9 561 |
| Justice/security | 1 000 | 960 | 1 005 | |
| Other | - 12 298 | - 13 094 | - 11 743 |
Operating expenditures will be reduced across departments and agencies will contribute fully to the public account recovery effort.
The reduction of operating expenses is primarily due to the improvement of the productivity of the administrations: dematerialization of exchanges with citizens, for example with regard to taxation, simplification of administrative rules, modernization of public procurement and optimization of real estate expenditures. It also relies on rationalization, for example with regard to the territorial settlements of the State in France and abroad, while ensuring access and quality of public service. These costs will be monitored, while preserving the necessary means to ensure the implementation of the Government ' s priorities.
Thus, the Department of Finance and Public Accounts will make an exemplary contribution to this development, with a net decrease in expenditures (excluding staff costs), of nearly €160 million in 2015 (and €314 million, compared to 2014, by 2017). This will be based on, among other things, the priority given to digital, particularly in the relations with the user, with the progressive generalization of the dematerialization of exchanges and payments, and on the adaptation of territorial networks, while maintaining welcoming arrangements adapted to the most fragile audiences.
The simplification of the steps will be sought with the deployment of teleprocedures and specific actions in the simplification of procedures for companies: the continuation of the establishment of the single national Customs clearing house, the removal of redundancy with the approach of the "SME test" and the "Tell it to us once" program, or the development of dematerialized exchanges between notaries and the services of the general public finance management (DGPFi).
The Ministry of Justice, which sees its budget increase by almost €100 million between the LFI 2014 and the PLF 2015 to ensure the implementation of the reforms undertaken by the Government, nevertheless takes all its part in the economy effort by continuing its modernization. For illustrative purposes, more effective management of court fees will provide a savings of €40 million in 2015 (national platform for judicial interception).
The control of agency spending, whose spending has increased much faster than that of the State over the past few years, is a structuring focus of programming, especially through better control of the revenues allocated to them. The level of resources will thus be better aligned with the needs associated with their activities, regardless of the nature of the funding they receive (taxes allocated or subsidies for public service charges): the use of these resources will thus be the subject of stricter supervision by the rules set out in this Programming Act. As early as 2015, several taxes for urban planning and housing operators will be integrated into the cap field, which is expected to be generalized in 2016.
Above all, massive efforts are being made with a reduction of €1.1 billion in tax resources allocated to agencies as early as 2015. The consular network and water agencies, which have experienced a very strong increase in their capacity over the last ten years, will thus be strongly associated with the public finances recovery effort. The ceilings of nearly 20 different affected taxes will be reduced.
Finally, the subsidies paid by the State to the operators will be controlled through the implementation of modernization and mutualization measures according to the same principles and methods as those implemented by the state administrations.
Beyond that, other targeted structural reforms are being implemented on each sector, especially for intervention devices.
As a result, all public policies will be affected by in-depth reforms of their interventions: aids to agriculture and overseas, economic interventions, audiovisual financing, access to law, etc.
These measures, which often involve better coordination of the action of the various actors in the sector, were presented in detail in the context of the financial bills for 2015 and 2016.
3. A three-year budget that declines the effort of the State and its agencies but also marks the priorities of the Government
The overall public finance programming covers five years (2014-2019). During this period, the state is the subject of more precise programming, which details, within the framework of a three-year budget, the allocation for each mission between 2015 and 2017.
The ceilings of credits per mission, excluding State contributions to the trust account (CAS) "Pensions", arbitrated under the three-year budget, are as follows:
Changes in credit ceilings per mission
(In CP and billions of euros)
| External action of the State | 2.80 | 2.84 | 2.81 | 2.96 | 2.74 |
| General and territorial administration of the State | 2.20 | 2,17 | 2,29 | 1.92 | 2,30 |
| Agriculture, food, forest and rural affairs | 2.93 | 2.93 | 2.66 | 2.52 | 2.49 |
| Official development assistance | 2.87 | 2.87 | 2.77 | 2.67 | 2.60 |
| Veterans, memory and ties with the Nation | 2.89 | 2.89 | 2.74 | 2.63 | 2.51 |
| Council and State control | 0.49 | 0.49 | 0.50 | 0.50 | 0.51 |
| Culture | 2,39 | 2,39 | 2,39 | 2.38 | 2,39 |
| Defence | 29,60 | 29,60 | 29,00 | 29,52 | 30.05 |
| Government Action Directorate | 1,13 | 1,14 | 1,17 | 1,16 | 1,17 |
| Ecology, sustainable development and mobility | 7.14 | 7.06 | 6.61 | 6.55 | 6.52 |
| Economy | 1.68 | 1.63 | 1.54 | 1.51 | 1,48 |
| Equality and housing | 7.40 | 13.11 | 13.18 | 13,31 | 13.15 |
| State financial commitments | 1.00 | 1.00 | 0.88 | 0.84 | 0.68 |
| School education | 46,31 | 46.30 | 47,47 | 47.8 | 48.19 |
| Financial and human resources management | 8.70 | 8.70 | 8.51 | 8.32 | 8.14 |
| Immigration, asylum and integration | 0.66 | 0.65 | 0.65 | 0.65 | 0.66 |
| Justice | 6.27 | 6.28 | 6.33 | 6.27 | 6.31 |
| Media, book and cultural industries | 0.81 | 0.81 | 0.71 | 0.63 | 0.55 |
| Outre-mer | 2.01 | 2.01 | 2.01 | 2,06 | 2,10 |
| Policy of the Territories | 0.81 | 0.81 | 0.74 | 0.70 | 0.66 |
| Public authorities | 0.99 | 0.99 | 0.99 | 0.99 | 0.99 |
| Research and higher education | 25,73 | 25,73 | 25,61 | 25,66 | 25,72 |
| Social and pension schemes | 6.51 | 6.51 | 6.41 | 6.40 | 6.40 |
| Health | 1,30 | 1,17 | 1.20 | 1,22 | 1.23 |
| Security | 12.12 | 12.15 | 12.15 | 12.18 | 12.18 |
| Solidarity, integration and equality of opportunity | 13.65 | 15,38 | 15,53 | 15,79 | 15,98 |
| Sport, youth and associative life | 0.45 | 0.45 | 0.45 | 0.50 | 0.54 |
| Labour and employment | 10,78 | 11,41 | 11,18 | 10.62 | 9,84 |
| For memory | |||||
| Unspent appropriation (*) | 0.04 | 0.04 | 0.01 | 0.02 | 0.02 |
| Relations with local authorities (*) | 2,614 | 2.69 | 2.73 | 2.73 | 2.73 |
| (*) Amount excluding parliamentary reserve. | |||||
Compliance with this three-year budget is guaranteed by two basic mechanisms:
- a self-insurance principle within each budget mission, both infra-annual and multi-year. Overtakings on a program will thus have to be offset by savings on the linking mission during the year concerned and do not justify, except exceptional circumstances, changes to the ceilings presented here;
- the constitution, at the beginning of the year, of a precautionary reserve. It will be able to cope with the hazards under management, both in expenditure and in revenue (by the cancellation of the reserve credits corresponding to the reductions in early revenue). This precautionary measure, provided for by Act No. 2001-692 of 1 August 2001 referred to above, is reaffirmed and quantified in section 12 of this Programming Law: in 2015-2017, the reserve rate will be at least 0.5% on staff credits and at least 6% on other credits.
While all ministries contribute to the €19.3 billion of savings that will be achieved by 2017 by the State and its operators, additional efforts have been planned to identify the financial means necessary for the implementation of the Government's priorities. The main measures financed by the state budget are detailed below: however, for other projects such as the energy transition or the housing recovery plan, an important part of the financial efforts can be made by other means of tax.
(i) Youth is one of the main areas of government action. It is reflected in important measures:
- school education:
The recruitment of 30,000 additional jobs for school education in three years, including 9,561 new posts in 2015, mainly in primary education, will, in accordance with the commitment of the President of the Republic, cover the needs related to the increase in the number of students, continue to improve the initial and continuing education of teachers, and implement the reform of priority education. This priority given by the Government to school education results in an increase of €1.9 billion from 2017 to 2014;
- of youth autonomy and employment:
Civic service is a privileged tool for commitment and self-reliance. It allows young people between 16 and 25 years of age to perform a mission of general interest in a public association or community. Its support will continue with the reception of 45,000 volunteers in 2015, a budget effort of almost €150 million.
The Youth Guarantee, experienced in 2014 in ten departments, will develop in 2015 to offer increased support to employment to nearly 50,000 young people between the ages of 18 and 25 in a precarious situation, paying them an allocation of an amount equivalent to the active solidarity income (SRA), representing a financial effort of €100 million compared to 2014. This system also includes, and above all, a strengthened support to training and employment, which will cover almost 100,000 young people by 2017.
Future jobs and the generation contract, which was launched as part of the structuring projects at the beginning of the quinquennium, are also sustained and consolidated.
- higher education:
In the continuity of the previous two years, 1,000 jobs will be created in 2015 in universities to contribute to the success of students, an effort of €58 million in full year. This effort will help to maintain the presidential commitment to create 5,000 posts on the quinquennium.
Enlargement of scholarships on social criteria as part of the merger of the 0 and 0 bis scale of the social criteria scholarships (+€77.5 million in 2015) will allow the fellows concerned to receive an aid of €1,000 per year, beyond the waiver of registration fees at the university.
(ii) In particular, the protection of the poor requires the preservation of social minima and the implementation of the poverty reduction plan.
The triennial programming takes into account the exceptional revalorization of the RSA by 2% per year beyond inflation.
The poverty reduction plan also provided for the creation or sustainability of 5,000 emergency places: these objectives have been exceeded and the funding of all these places is integrated into the three-year programming.
The allowance for disabled adults is strictly preserved.
(iii) The guarantee of the security of the French
Job creations at the Ministry of Justice will be continued between 2015 and 2017 (+1,834 full-time equivalents), notably to help create positions of prison advisors for insertion and probation (CPIP). Security will also benefit from the creation of 1,405 jobs in three years in the national police and gendarmerie.
Finally, the Military Programming Act (MPA) adopted in 2013 will be implemented to provide our forces with the means to carry out their missions. The 2015-2017 budgets will thus make the transition to the new military model, more effective because better adapted to the new forms of crises. The payment credits for the "Defence" mission, traced to section 13 of this programming law, will be supplemented with exceptional revenues to strictly comply with the annuities of the military programming law, i.e., €31.4 million in 2015 and 2016 and €31.6 million in 2017. In accordance with section 3 of the MPA, in the case that the amount of these exceptional revenues or the calendar that the corresponding appropriations are allocated to the defence budget would not meet the financial trajectory of the MPA, these resources will be fully compensated by other exceptional revenues or by budgetary appropriations on the basis of interdepartmental funding. The updating of the military programming that will take place before the end of 2015 will allow the national representation to check with the outlook for exceptional revenues in their nature, their amount and schedule in order to reduce, where appropriate, the share of these resources within the financial trajectory provided by the MPA.
B. - The trajectory of various central administrative bodies
In 2013 and 2014, the various central government bodies (ODACs) recorded surpluses related to the recovery of the State's public funding and restructuring (EPFR) debt (€4.5 billion) in 2013 and, in 2014, to the allocation of the State under the new future investment programme (€ 4.6 million). These outstanding items, the aggregate balance of ODAC would be in deficit and the latter would gradually recover before the end of the programming period.
During this period, the two parts of the IAP would degrade the balance of the ADC operators of this program as the disbursements would take place, except for the year of endowment by the State (2014). Conversely, the contribution to the public service of electricity (CSPE) (13) would see its revenues increase each year until the debt was cleared and a positive balance would then be shown. Contrary to the ban on falling to a credit institution for a period beyond a year (see infra), the other ODACs would be globally balanced.
Expenditures, revenues and balances of ODAC
(In GDP points, unless otherwise stated)
| Expenditure | 3.8 | 4.1 | 3.9 | 3.9 | 3.8 |
| Income | 3.9 | 4.1 | 3.9 | 3.9 | 3.8 |
| Balance | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 |
| Balance (in Md€) | 1.3 | - 0.1 | - 0.9 | - 0.4 | - 0.2 |
C. - The trajectory of social security administrations
The following table shows the trajectory of social security administrations for the years 2013-2017:
Actual expenditure/Receivables/Sold
(In GDP points, unless otherwise specified)
| Expenditure | 26,6 | 26.9 | 26,6 | 26,4 | 26.1 |
| Income | 26,2 | 26,4 | 26,3 | 26,4 | 26,3 |
| Balance | -0.5 | - 0.5 | - 0.3 | 0.0 | 0.3 |
| Balance (Md€) | - 10.1 | - 10.6 | - 6.6 | - 0.5 | 6.4 |
| Outstanding balance | - 1.0 | - 1.0 | - 0.8 | - 0.6 | - 0.3 |
| Balance off CADES-FRR (Md€) | - 20.6 | - 21.5 | - 18.1 | - 12.5 | - 6.1 |
The accounts presented in the Social Security Financing Act and the Financial Administration Act are subject to separate scopes and accounting policies. The scope of social security administrations (SSOs) covered by the PSSA is wider than that covered by the PSSA, including the unemployment benefit scheme, the supplementary pension plans for employees and social insurance organizations (including hospitals). In addition, the accounting policies used by national accounts differ from the single accounting plan of social security agencies. In particular, they exclude net endowments from provisions, depreciation and surplus-values on transfers of financial capital or foreign exchange transactions.
1. Mastering health insurance expenses by ensuring the quality of care
The NDAM's governance and leadership reforms have been effective in the past few years and have under-implemented the initial objective voted annually in the SSA. As a result, it was already acquired in June 2014, that the 2013 NDAM health insurance expenditures would be less than €1.4 billion at the level provided by the SSA for 2013. This sub-execution was fully taken into account in the construction of the 2014 ONDAM, first in the original LFSS and then in the context of the rectificative LFSS, in order to permanently lower the evolution of health spending by strictly adjusting the objective to the results. The estimates presented in the September 2014 report of the Social Security Accounts Commission (CSCC) finally indicate a subconsumption of the 2013 NDAM by €1.7 billion, after taking into account the discontinuation of the provisions.
In addition to the structural reforms implemented, the reserve of some of the NDAM's assets, at the beginning of the year, at a minimum of 0.3 per cent of the voted objective, contributed to this result and demonstrated its effectiveness in managing health insurance expenditures. This provision, introduced in previous public finance programming laws, proved to be effective and properly calibrated; It is therefore proposed to be renewed in this programming law.
For example, infra-annual gels on NDAM 2014, at a height of €0.5 million, will help to secure the implementation of the corrective LFSS target, despite the expected increase in city care related to the introduction of new treatment for patients with hepatitis C virus (HCV).
As part of the overall public finance strategy, the NDAM will also see its rate of change lowered to an average of 2% over the period 2015-2017, an overall savings effort of €10 billion over three years. In 2015, expenditures in the NDAM field will be contained in change of 2.1% compared to the 2014 target. Compliance with this objective will require an unprecedented effort of savings, up to €3 billion in 2015 to compensate for a tendential change in spending of 3.9%.
This trajectory requires, on the one hand, to continue and enhance the effort of structural savings on the field of health insurance, but also, on the other hand, to ensure a strengthened management of its execution, without diminishing the quality of care or increasing the rest of the insured, with the aim of preserving the innovation and access of all to the most effective care.
The savings plan that structure the deployment of the SNS will be structured around four axes:
The first focus is on strengthening the effectiveness of hospital spending. In particular, it involves mutualizations that can rely on new territorial hospital groups and savings on hospital purchases, where very large margins remain. In keeping with these actions, which are partially incorporated in the Health Act, the tools available to regional health agencies in the area of financial supervision of health institutions in difficulty will be strengthened.
The second axis is the ambulatory turn, which will be operated in hospitals. An acceleration in the diffusion of outpatient surgery will naturally be the pivot of this overall transformation aimed at a better link between city and hospital care. Other actions will be taken: development of home hospitalization, improvement of out-of-home care and optimization of the course for certain diseases or populations.
The third axis concerns health products. Beyond price control measures, a particular emphasis will be placed on the development of the use of generic drugs in order to lift the latest brakes to a wider diffusion, generating significant savings.
The last focus is on improving the relevance of the use of our care system in all its components: reducing unnecessary or redundant acts, whether in the city or in health care institutions, controlling the prescription volume of medicines and combating iatrogeny, or optimizing the transport of patients. These actions will be included in the National Risk Management Program established by the Health Act.
2. Old-age insurance and family allowance expenses for each of the programming periods
The table below presents the forecasting expenditures for old-age insurance and family allowances of the mandatory basic social security plans for the years 2013-2017:
Net expenses of compulsory basic social security schemes
(In Md€)
| Older branch | 215,8 | 219.9 | 224.0 | 229.9 | 236.5 |
| Family Branch | 58.2 | 59.1 | 54,6 | 55.1 | 56.2 |
The evolution of basic plan old-age insurance expenditures would be 2.4% on average over the period 2013-2017. This evolution reflects the effect of the reforms adopted within the framework of the Act No. 2014-40 of 20 January 2014 ensuring the future and justice of the pension and pension system Act No. 2010-1330 of 9 November 2010 bringing pension reform, which, by gradually completing retirement age limits, leads to later retirements. In a context of low inflation, pension stability in 2014 also contributes to expenditure moderation.
The expenses of the Family branch are affected by a change of perimeter in 2015 corresponding to the transfer to the State from the personalized housing assistance (PAL) currently financed by the Family branch. This transfer covers a portion of the social contribution reductions implemented by January 1, 2015 Act No. 2014-892 of 8 August 2014 for 2014 in the framework of the liability pact. It reduces the expenses of the Family branch of mandatory social security schemes by €4.8 billion in 2015.
In addition to the rise of the savings already implemented in 2014, the family allowance spending trajectories presented include a component of future savings in accordance with the provisions proposed for Parliament's vote in the Social Security Financing Bill for 2015. These provisions will bring €700 million in savings on legal benefits in 2015. They will significantly reduce the average rate of change in spending: it would have been 2% per year in the absence of the measures provided for in the funding law and will be reduced to 1.3 per cent as a result of the measures taken and neutralizing the transfer of LPA funding to the State, which is neutral on the balance of all public finances.
3. Expenditures on supplementary pension plans and unemployment insurance for each of the programming periods
The balance of supplementary plans would be €2.5 million between 2014 and 2017. This improvement is explained in particular by the significant efforts undertaken by the AGIRC and ARRCO plans under the agreement signed in 2013, whose implementation would reduce spending in 2014 and 2015 (under a point pension index) and support income (upper of contribution rates). The continuation of this process of re-establishing the accounts of the complementary regimes would allow the realization of 2 million euros of additional savings by 2017.
Expenditures, income and balances of supplementary pension plans
(In Md€ in national accounts)
| Balance | - 2.2 | - 2.4 | - 1.9 | - 1.3 | 0.1 |
| Income | 77.1 | 78,7 | 81.2 | 84.3 | 87,9 |
| Expenditure | 79.3 | 81.2 | 83.1 | 85,5 | 87,8 |
The balance of the unemployment benefit plan would be adjusted by €2.2 million between 2014 and 2017 as a result of the gradual improvement of employment and the measures taken by social partners (+€0.5 million by 2017 under the 2014 agreement, +€0.10 billion in 2015 under the partial freeze of compensation), which would be supplemented from 2016 to reach a total effort of €2 million in 2017.
Unemployment insurance expenses, revenues and balances
(In Md€ in national accounts)
| Balance | - 3.6 | - 4.0 | - 3.4 | - 2.5 | - 1.8 |
| Income | 33,6 | 34.3 | 35.1 | 36.3 | 37,8 |
| Expenditure | 37.2 | 38.2 | 38.5 | 38,8 | 39.6 |
D. - The trajectory of local government
The balance of territorial authorities would reflect two major movements during the programming period. On the one hand, local spending would be sensitive to the investment cycle, marked by the March 2014 municipal elections, with declines in 2014 (- 5%) and 2015 (- 6%), then a gradual recovery in line with the previous cycle, starting in 2017, after a relative stability in 2016. It is anticipated that a slowdown in investment dynamics in the lower years of the cycle - 2014 and 2015 - is equivalent to those on average observed during the past cycles. On the other hand, the decline in the State's financial competitions will affect the resources of the territorial authorities (- €10.7 billion between 2015 and 2017, after a refaction of the overall operating staffing of - €1.5 billion in 2014), which should invite the territorial authorities to increase control of their operating expenses. In total, the local balance would be virtually stable between the start and end of the programming.
If local government revenues will be affected by the decline in the state's financial competitions over the next three-year period, it should be noted that the local tax bases are spontaneously dynamic and generate a steady increase in community resources. In addition, this decline will be all the more sustainable since the State's financial competitions account for only about 28 per cent of the €189 billion in community operating revenues, composed of 60 per cent of tax revenues. In total, revenues from local authorities will increase by almost €12 billion between 2014 and 2017, an average of +1.6% per year.
Local government expenditures, revenues and balances
(In GDP points, unless otherwise stated)
| Expenditure | 11.9 | 11.9 | 11.8 | 11.6 | 11.4 |
| Income | 11.5 | 11.6 | 11.5 | 11.3 | 11.1 |
| Balance | - 0.4 | - 0.3 | - 0.2 | - 0.3 | - 0.3 |
| Balance in Md€ | - 9.2 | - 7.3 | - 5.3 | - 6.4 | - 7 .0 |
Ultimately, increased ownership of local spending is expected to result in an out-of-investment expenditure that would evolve in a limited way over the entire period. Investment spending would decrease spontaneously in 2014 and 2015 as a result of the electoral cycle and rebound from 2016. Local investment would also be supported by the new state-region plan contracts for the years 2015-2020 and by the development of the very broadband financed by the future investment programme.
In total, the slowdown in local spending, more marked at the beginning of the programming period (+1.2% in 2014 and +.5% in 2015, after +3.4% in 2013), would be followed by a global recovery in line with inflation at the end of the period (about 2% per year in 2016 and 2017). This programming law introduces a local expenditure objective that, starting in 2016, will be reduced to the level of the community (community block, departments and regions) after the advice of the local finance committee (see below).
E. Governance rules
This Public Finance Programming Act is the first programming law adopted under the empire of Organic Law No. 2012-1403 of 17 December 2012 relating to the programming and governance of public finances, which provides, inter alia, that rules may "cool expenditures, revenues and balances or the use of indebtedness of all or part of government. »
The new governance rules of this Programming Act are intended to restore public accounts, whether they are carrying out good public management measures or to improve information available to Parliament; In particular, it introduces financial governance rules for public administrations that had not or little of it so far. The pre-assessments of the various articles, as annexed to this bill, complement the presentation below.
1. Cross-cutting measures for the management of public, preventive and corrective finances
The introduction of a review of all public administration expenditures: the PSL creates an expense review that must contribute to ensuring compliance with the public financial trajectory. These journals, which will be conducted each year before the end of February and whose themes will be discussed with Parliament, will be used during the budget construction, in order to accurately document the savings needed to respect the trajectory, especially from 2016.
The establishment of a public finance conference: covering the entire field of public administration, this forum is intended to involve all public finance actors in the respect of the recovery path of public accounts. This conference complements public finance management tools; by meeting obligatoryly in the event of the triggering of the correction mechanism, it will be one of the modalities for the implementation of this mechanism and will be able to discuss with all actors the causes of its release and possible corrections.
The rules for the provision of credits on State expenditures: the PSL provides for the tightening of the minimum reserve rules for State appropriations (0.5 per cent of the staff credits, i.e. an unchanged level, and 6 per cent of the other government expenditures, as compared to 5 per cent in the previous PSL) in order to allow compliance with the guidelines set in expenditure by an infra-annual pilotage.
The principle of allocation of surplus revenue to debt:Article 15 of Act No. 2012-1558 of 31 December 2012 for the years 2012 to 2017 is repealed and is replaced by section 17 of this Programming Act.
The socio-economic evaluation of public investment projects: section 17 of the Act is renewed. It provides that civil investment projects financed by the State, its public institutions, public health institutions or health cooperation structures are subject to prior socio-economic evaluation.
2. Governance measures on ODAC and state agencies
The supervision of the use of affected taxes: drawing conclusions from the work of the Mandatory Sampling Board (14), this Programming Act provides for four measures to better regulate the use of affected taxes. First, only taxes with an economic logic of "nearly-debtedness", a sector-specific sampling or a guaranteeing contribution, are likely to be affected. Secondly, any new assignment must be reduced and capped. Thirdly, the affected taxes will be systematically capped as of January 1, 2016 or, if not, rebuked as of January 1, 2017, any derogation from this principle to be justified in an appendix to the PLF. Finally, agencies receiving taxes and covering these taxes themselves will now have to transmit to their guardians information each year to better appreciate and control the evolution of these resources.
The principle of the prohibition of borrowing of ODAC from a credit institution or through bond issuances for a period of more than one year:Article 12 of Act No. 2010-1645 of 28 December 2010 for the years 2011 to 2014 is updated with new European accounting references, and completed with a one-year period for newly qualified OAS organizations. The renovation of this article reflects further efforts to control public debt.
The improvement of the information and control of Parliament on state agencies: the yellow "Operators" will now include: an assessment of the creations or suppressions of public operators or organizations during the year preceding each financial bill; a balance sheet covering three exercises of the evolution of the payroll of the operators, their jobs and their sources of financing (budgetary or tax affected); information on the evolution of their real estate park. In addition, agencies will have to make public every year the aggregate sum of the ten most important gross remuneration in the structure.
Secured use of public-private partnerships (PPPs) of ODAC, public health institutions and public health cooperation structures with public morality: The PSPA plans to secure the use of PPP contracts. The PSL therefore imposes a prohibition on the direct conclusion of one of these contracts. If a recourse to PPPs in these institutions remains possible, it implies that they have recourse to the expertise of their guardianship department for the instruction of files and the signing of contracts, in order to centralize the expertise related to this type of contract in a single pole and thus avoid the dispersion of the know-how.
3. Governance measures on local communities
The introduction of a local expenditure objective: while the expenses of the State, health insurance and those of the mandatory basic social security regimes are already covered by standards or objectives, the local expenditure was an exception, to which this programming law seeks to remedy. Now, thanks to the objective of the evolution of local public spending (ODEDEL), each of the subsectors of public administrations will be monitored and programming, in line with the European budgetary commitments of France covering all public spending. In keeping with the free administration of the territorial authorities, this objective is indicative, and expressed in accordance with the general accounting standards in order to be directly understandable by the territorial authorities.
Secure the use of PPPs from local authorities: a specific procedure will allow them to use partnership contracts in a secure manner through the expertise of state services, on the one hand, on the screening assessment and, on the other, on the financial consequences of the project for the community. In order to respect the principle of free administration, these opinions will not be binding but will be brought to the attention of the deliberative assembly prior to the approval of the contract.
4. Governance measures on social security administrations
The rules for the provision of credits on health insurance expenses: this programming law provides for the renewal of the reserve rules on health insurance expenses (0.3 per cent of the NDWA) in order to allow compliance with the spending guidelines by infra-annual pilotage.
The strengthening of the budgetary management of health facilities subject to a recovery plan: for these institutions, the statement of income and expenditure forecasts (EPRD) and its annexes, including the forecast table of paid staff, will be expressly approved by the Director General of the health agency (ARS). The ERD will not be able to approve if the evolution of the workforce is manifestly incompatible with the evolution of the activity of the health establishment concerned.
The improvement of the information and control of Parliament on the changes in the spending of health care workers: the Government will report annually on the changes in the spending of health care workers, including the underlying factors of this change: the impact of class action and the pace of salary change for all public health care workers (public hospital and medical personnel).
Improving the information and control of Parliament on the financial outlook for unemployment insurance: The Unédic will transmit annually to Parliament and the Government, by 30 June, its three-year financial outlook, including the effects of the economic component of the evolution of wage employment and unemployment on the financial balance of the unemployment insurance scheme. On the basis of this report, the Government transmits to Parliament, as well as to the Social Partners Managers of the Unédic, by December 31, a report on the situation of unemployment insurance with regard to its financial balance, including measures that could contribute to achieving its financial balance.
5. Governance measures on tax expenditures and social niches
The principle of limitation in time of tax expenditures and social niches:Article 16 of Act No. 2012-1558 of 31 December 2012 referred to above provided that any new text establishing a tax expenditure or a social niche should provide for a limited period of application for such provisions. Combined with section 18 of the Act, which provided for a systematic assessment of all derogatory devices one year before their expiry and one fifth of the other devices, this article was intended to allow the Government and Parliament to have a permanent instrument of appreciation of the relevance of tax expenditures and social niches. This programming law now introduces, on the one hand, a device limiting new tax expenditures and social niches to three years and, on the other hand, a systematic assessment after this period coupled with, in the event of their maintenance, an obligation of justification.
The transmission to Parliament prior to the filing of the PLF and PLFSS of the cost of tax expenditures and social niches:Article 20 of Act No. 2012-1558 of 31 December 2012 referred to above is reappointed. It provides that the Government shall present annually to Parliament the cost of tax expenditures and social niches for the last fiscal year ended, for the current fiscal year, as well as for the coming fiscal year, as well as a balance sheet of creations, amendments, and deletion of measures within 12 months of the filing of financial laws.
6. Improving information in Parliament
The transmission to Parliament of the Stability Program: Article 14 of Act No. 2010-1465 of 28 December 2010 is renewed. This section provides that the stability program is forwarded and submitted to Parliament's vote, which is entitled to enlighten its vote and in accordance with theArticle 17 of Organic Law No. 2012-1403 of 17 December 2012 on the programming and governance of public finances in a opinion of the High Council for Public Finance (HCFP) on the macroeconomic forecasts selected.
The annual presentation to Parliament of a PSLRA assessment: The Government shall present an annual review of the implementation of the various sections of the PSLRA at the time of the Public Finance Policy (PSL) debate under section 48 of the PSL.
The annual transmission to Parliament of a report detailing the assumptions used in calculating the tendential evolution of public spending.
The presentation, in dematerialized form, of a report annexed to the draft finance law detailing the individual responsibilities paid to territorial authorities.
Reporting to Parliament on public debt and tax credits.
Annex 1
Structural effect by subsector
The discretionary changes in government revenues and expenditures are used to determine consolidation efforts. From a structural point of view, an increase in the corrected spending on the effects of the less rapid economic situation than the potential gross domestic product (GDP) and the decisions on increases in mandatory levies are structural efforts (the weight of public spending in the potential GDP is reduced and revenue is increasing). Conversely, more dynamic spending than potential GDP and downsizing decisions induce structural stress. The calculated structural effort is the "discretionary" component of the structural balance variation. The non-discretionary component is that public revenues evolve spontaneously at a different rate than GDP (when income elasticity is not unitary). Finally, a gap may exist between the fiscal cost dynamics of the tax credits and their accrued fees (for the amount of the debt), which also contributes to structural adjustment (composing "tax credit key" cf. annex 4).
In order to identify the share of the structural effort carried out by each sub-sector, a more detailed analysis is required, taking into account the elements that influence the balance of sub-sectors but not that of all public administrations: transfers and interest expenses between sub-sectors of public administrations and perimeter changes (e.g., changes in the allocation of taxes between sub-sectors). The simple agreement is to calculate the expenditure effort of a subsector by retaining only the constant perimeter of the expenditures it makes to economic agents that are not within the scope of public administrations, and to calculate its revenue effort by retaining only the decisions of increases/lows of mandatory levies assigned to this subsector.
The various possible cases are summarized in the table below, as well as the discrepancies with respect to the definition of a structural balance of the subsectors of public administrations:
| Subsector expenditures | ||
| Deployment of the subsector to an economic agent outside of the APUs (e.g., state operating expenses, CNAF family allowances). | Contributes to the structural effort of the subsector as soon as the corrected expenditure on the effects of the cycle progresses less quickly than the potential GDP. | Contributes to improving the structural balance of the subsector as soon as the corrected expenditure on the effects of the cycle progresses less quickly than the potential GDP. |
| Deployment of the subsector to another APU subsector (e.g., government revenue levies to local authorities). | Does not affect the structural effort of the subsector costs. | Contributes to improving the structural balance of the subsector as soon as expenditure progresses less quickly than potential GDP. |
| Change in perimeter on expenditures between subsectors (e.g., change in spending allocation). | Does not affect the structural effort of the subsectors involved. | Contributes to the evolution of the structural balance of the subsector. |
| Subsector recipes | ||
| New PO measures allocated to a subsector (e.g. tax increases). | Contributes to the structural effort of the subsector. | Contributes to the evolution of the structural balance of the subsector. |
| Change in perimeter on subsector revenue (e.g., change in revenue allocation). | Does not affect the structural effort of the subsectors involved. | Contributes to the evolution of the structural balance of the subsector. |
| Subsector revenues from another APU subsector (e.g., state revenue levies to local authorities). | Does not affect the structural effort of the subsectors involved. | Contributes to the evolution of the structural balance of subsectors based on relative changes in revenues to potential GDP. |
| Spontaneous evolution of revenues different from the evolution of GDP (e.g., high change in corporate tax). | Does not affect the effort of the subsectors concerned. | Contributes to improving the structural balance of the subsector as soon as the spontaneous elasticity of the recipes exceeds the historical average elasticity (and reciprocally). |
Structural balances by subsector
(In potential GDP points, unless otherwise stated)
| UNCT | Actual balance (GDP points) | - 3.2 | - 3.6 | - 3.6 | - 3.3 | - 2.7 |
| Economic balance (GDP points) | - 0.7 | - 0.8 | - 0.8 | - 0.7 | - 0.6 | |
| Ad hoc and temporary measures | 0.0 | 0.0 | - 0.1 | - 0.1 | 0.0 | |
| Structural balance | - 2.5 | - 2.7 | - 2.7 | - 2.5 | - 2.1 | |
| APUL | Actual balance (GDP points) | - 0.4 | - 0.3 | - 0.2 | - 0.3 | - 0.3 |
| Economic balance (GDP points) | - 0.2 | - 0.2 | - 0.2 | - 0.2 | - 0.2 | |
| Ad hoc and temporary measures | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Structural balance | - 0.2 | - 0.1 | 0.0 | - 0.1 | - 0.1 | |
| ASSO | Actual balance (GDP points) | - 0.5 | - 0.5 | - 0.3 | 0.0 | 0.3 |
| Economic balance (GDP points) | - 0.7 | - 0.9 | - 0.9 | - 0.8 | - 0.6 | |
| Ad hoc and temporary measures | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Structural balance | 0.2 | 0.4 | 0.6 | 0.8 | 0.9 |
Structural effect by subsector
| UNCT | Change in structural balance | 0.9 | - 0.2 | 0.1 | 0.2 | 0.4 |
| Structural effect | 0.9 | 0.2 | 0.3 | 0.2 | 0.2 | |
| Income efficiency | 0.8 | 0.0 | 0.1 | 0.0 | - 0.1 | |
| Expenditure | 0.1 | 0.2 | 0.2 | 0.2 | 0.3 | |
| Other | 0.0 | -0.4 | - 0.2 | 0.0 | 0.2 | |
| APUL | Change in structural balance | - 0.2 | 0.1 | 0.1 | - 0.1 | - 0.1 |
| Structural effect | -0.2 | 0.1 | 0.3 | 0.1 | 0.2 | |
| Income efficiency | 0.0 | 0.0 | 0.1 | 0.1 | 0.0 | |
| Expenditure | -- 0.2 | 0.1 | 0.2 | 0.1 | 0.1 | |
| Other | 0.0 | 0.0 | - 0.2 | - 0.2 | - 0.2 | |
| ASSO | Change in structural balance | 0.3 | 0.2 | 0.2 | 0.2 | 0.1 |
| Structural effect | 0.5 | 0.1 | 0.0 | - 0.1 | 0.0 | |
| Income efficiency | 0.6 | 0.1 | - 0.1 | - 0.2 | - 0.2 | |
| Expenditure | - 0.1 | - 0.1 | 0.1 | 0.1 | 0.2 | |
| Other | - 0.1 | 0.1 | 0.2 | 0.2 | 0.1 | |
| Note de lecture: the "Other" line includes elements of structural adjustment not included in the structural effort. These elements are: the effect of the elasticity of mandatory levies, changes in the share of non-mandatory revenues in the potential GDP and neutral elements on the structural balance of all APUs but which influence the level of structural balances by subsector (variation of expenditures or revenues of transfers between public administrations and reallocation of revenues). | ||||||
Annex 2
Methodological information on the triennial budget
I. - Constant scope and budgeting charter
A. - The principle of constant field
The reality of the expenditure dynamics is appreciated between two consecutive financial laws, at constant perimeter (or field). Indeed, the perimeter of State spending can be led to change from one year to another, with expenditures or revenues being newly recorded in the State budget, others on the other being out of the perimeter of the State budget. To assess the real dynamics of the State's expenditure on an identical field (constant field) between two exercises, the budget must therefore be withdrawn from these perimeter changes. To this end, only expenditure movements and revenue assignments are included in the calculation of the State's expenditure standard provided for in section 8 of the Programming Law, which increases or decreases the level of public expenditure.
Conversely, movements that constitute a mere reimputation within the scope of the norm (e.g., between general budget and revenue collection) or balanced movements in income and expenditure, between this perimeter and another entity (e.g., local authorities), should not be recorded in this calculation. These movements, balanced in income and expenditure, are called transfer measures when taking place within the scope of the norm or perimeter measures when taking place between the same perimeter and another entity. Their consideration allows us to move from the constant field to the current field, on which the financial bill of the year is presented, but they are without influence on the appreciation of the budget dynamics.
B. - Budgeting charter
The following set of rules are the budgeting charter of the State, which allows, by specifying the modalities for taking into account field changes in the calculation of the standard, to determine the evolution of the expenditure at constant field level. This charter takes into account the integration into the expenditure standard of certain affected taxes, carried out since 2012.
(i) Perimeter measures, which give rise to registrations or vice versa to deletions of credits that do not have to be integrated into the evolution of constant-field expenditures, cover situations in which the State:
- transfer to another entity an expenditure that it had previously made, by transferring resources in the same amount to finance it;
- includes in its budget a new expenditure previously financed by another entity, as well as income in the same amount;
- is responsible for an expenditure previously financed by capital holdings or by an deleted entity.
The decentralization movements illustrate the first case. The second corresponds to rebudgétisation measures, for example the concomitant and balanced reintegration within the general budget of a recipe assigned to an operator and the expenses it finances. On the other hand, in the case of a capped affected recipe and thus already recorded in the expenditure standard, it is a transfer measure within the scope of the standard (see below). The third case, finally, does not increase public spending or the public deficit, since the expenditure already existed and was financed by a recipe not taken into account in the public balance under the rules of national accounts.
(ii) Transfer measures, because they relate to credit movements within the field covered by the standard, have no impact on the level of the norm.
The most frequent transfers are made between missions of the general budget; However, they may also be made between appropriations from the general budget and, for example, from income.
Similarly, the decrease in the ceiling of a tax allocated to an organization accompanied by the creation or rise of a subsidy to that agency is a transfer measure (see below).
(iii) Changes in tax caps and other affected revenue may cover four different situations:
- modification of the ceiling of an existing tax or other recipe already capped into a finance law.
The change in the ceiling results in a change in the resources allocated by the state to the entity. The change in the ceiling in the Finance Act has the same effect as the downward (or upward) trend of a public service subsidy in expenditure and is therefore reflected in the expenditure standard. If the ceiling is lowered, an economy shall be counted as long as the level of the ceiling is less than or equal to the forecast yield of the tax set out in the "Voies and Means" Schedule of the Finance Bill (PLF), for an amount commensurate with the actual decrease in the organization's resources;
- added in the cap item of an existing tax or other recipe already existing but not so far capped;
The cap measurement is then treated as a perimeter measure for the amount corresponding to the assessment of the product of the recipe. The new economy or expenditure, if any, related to the fixing of the ceiling to a level different from the assessment of the proceeds of the recipe is deducted from the expenditure standard. This is an evolution of the resources allocated to the entity;
- new recipe assignment;
Any new revenue allocation to a public body other than social security administrations, territorial authorities, and public inter-communal cooperation institutions shall be taken into account fully in the expenditure standard, equal to the cap level. This measure is in fact equivalent to granting a grant to an organization.
- rebudges a capped affected recipe;
In the event of a rebunishment of a recipe allocated to an organization, which is already the subject of a financial bill and is therefore taken into account in the expenditure standard, the payment of a subsidy to that organization is a transfer measure provided that the amount of the subsidy is identical to the forecast return of the recipe actually collected by the organization. In this case, the difference between the subsidy paid and the recipe cap is taken into account within the standard and thus constitutes an economy (subsidy below the old ceiling) or a new expenditure (subsidy above the old ceiling). If the forecast yield of the recipe is greater than or equal to the ceiling of the recipe, rebudgétisation is a transfer measure. Conversely, if the forecast yield is less than the ceiling, the rebudgétisation results, on the one hand, at a perimeter measure decreasing the level of the expenditure standard for an amount equal to the difference between the recipe cap and its forecast yield and, on the other hand, to a transfer measure, the forecast amount of the recipe. The increase in budgetary appropriations by transfer is thus limited to the forecasted return of the revenue that is rebudden, with any additional increase being recorded as a new measure.
(iv) An exceptional contribution from an operator or other government agency to the general budget (excluding social security or territorial authorities) may result in a decrease in public spending, as it is similar to a decrease in the resources allocated to that agency. Given the one-time nature of such a measure, its impact on the norm can only be taken into account in the year of the State's perception of these resources.
The movements of expenses and revenues considered as perimeter measures, the proposals to extend the scope of the cap of the affected taxes are presented in the general statement of the reasons for the year's financial bill.
II. - Taxation doctrin
Conversely, the direct allocation of taxation of all kinds, in contrast to the allocations made by the general budget of the State, makes this public funding evade the annual control of Parliament as part of the examination of the financial bill. The allocation is also an exception to the principle of budgetary universality. Finally, most of the taxes affected are undergoing a dynamic evolution, which, in the absence of a limitation mechanism, leads to an increase in the expenditure of the bodies concerned at a higher rate than that of the State or of the organizations financed by budget subsidies included in the State's expenditure standard.
In accordance with the guidance set out in section 16 of the Financial Administration Act, the use of all types of taxation to third parties other than social security agencies, territorial authorities and public inter-communal cooperation institutions must be subject to specific supervision. In order to ensure proper monitoring of the State's expenditure, the same article sets out a goal of capturing or rebunishing, on the horizon of the three-year programming, all taxes for the benefit of third parties other than social security agencies, territorial authorities and public intercommunal cooperation institutions.
A. - The criteria for maintaining an assignment
This assignment doctrine specifies the framework within which the criteria defined by the Financial Programming Act are assessed to authorize the maintenance or establishment of a tax assignment. The taxes concerned are those to a legal entity other than the State, social security agencies, territorial authorities and public institutions of intercommunal cooperation, which are listed and evaluated in the annex "Measurement of the Ways and Means" to the financial bill, in accordance with the 1st of Article 51 of the LOLF. The Public Finance Programming Act expressly excludes the allocation of taxes, with three exceptions:
- the first exception is that of the resources with a logic of " quasi-redevance", that is to say that they are part of the economic logic that prevails in a system of rights or royalty, in connection with the service rendered. The affected resource is thus the counterpart of a service directly rendered to a user by the employee. Its amount must be able to be assessed on objective basis, including through the use of the accounting of the emotional organization, which must be able to show the proportionality between the cost of the service rendered and the amount paid by the user. This definition is economically appreciated; if it is closer to the jurisprudential definition of the royalty, it is not intended to replace the latter;
- the second exception concerns the levies financing shares of mutualisation or sectoral solidarity within a sector of activity. These levies are, on the one hand, specific to rely only on a single sector of economic activity or on a limited group of subject matter and, on the other, to benefit them exclusively. In such a case of figure, the allocation of a resource may be justified, from an economic point of view, by improving consent to tax. Such consent, however, requires that it be objected to by the existence of a clear link between the taxation sector and the missions performed by the agency. For these contributions that finance missions to the margins of public service, or entities on which State control is weak an evolution towards a voluntary form of contribution may in fine be considered;
- finally, the third exception is that of insurance or compensation funds and presenting a logic of risk pooling, and which require the regular constitution of financial reserves.
B. - General policy on affected taxation
In accordance with the principles set out in the Budgeting Charter, any creation of a new affected tax or reassignment must, on the one hand, be justified under the criteria mentioned above and, on the other, be accompanied by a cap of that tax. This cap is recorded in the state expenditure standard.
In addition, the Financial Programming Act provides:
- a cap of all taxes affected before January 1, 2016; the level of cap should be defined in line with the budget charter;
- the reinstatement within the general budget of the State of uncapped taxes as of 1 January 2017; these rebudges may be accompanied by a transfer of the collection to one of the State's tax administrations, particularly if it is determined that the costs of collecting the tax would be reduced; failing to recover by a state administration, the collection databases will have to be transmitted to the technical and financial guardians by the collecting bodies.
III. - Nature and scope of multi-year budget authorities
A. - Credit caps and job schedules set out in the three-year budget
The multi-year budget determines two levels of payment credit ceilings to be met in the construction of the original finance law (FIA) each year of the programming period.
(i) It first includes, for each of the three years of the programming, a total limit of payment credits for expenses subject to the "0 value out of debt and pensions" rule, in accordance with section 8 of this Programming Act. This ceiling is independent of the inflation hypothesis and corresponds, at constant field level, to the credits fixed in the original finance law for 2014.
This ceiling is part of the broader perimeter of the expanded standard (including debt burden and pensions), which sets a total limit of credits for all State expenditures for the five years of programming. This overall ceiling does not increase faster, between two successive LFIs, than the forecasting evolution of prices (section 8 of this Programming Act, which sets out the principle of the "0 volume" standard) associated with this Programming Act or, under the terms provided infra, the forecasting evolution of prices associated with the proposed financial law of the year, if it is different. Thus, this global ceiling can be seen upward and downward in the event of a revision of the inflation assumption.
(ii) The multi-year budget also includes the 2015 and 2017 ceilings for each of the general budget missions (see section 13 of the Programming Act). These are expressed as payment credits.
For the year 2015, the mission-level expenditure limits and the program-by-program distribution are consistent with those of the PLF for 2015.
For the year 2016, credits per mission are limiting ceilings that could only be reduced if the overall expenditure objective was changed.
For 2017, credits per mission will be subject to adjustments, in accordance with the overall spending limit.
B. - The link between multi-year budgets and annual financial laws
For each of the years of programming, the Finance Bill is drafted and presented to Parliament in accordance with the ceilings set out in the multi-year budget.
The first year of the programming is the framework of the 2015 Finance Bill, which provides a fine breakdown of credits per destination and, for example, by nature.
The second year of the programming will, in the same way, be the subject of a decline in the level prescribed by the organic law (programs, shares, titles and categories) as part of the 2016 Finance Bill.
Finally, the third year of the programming (2017) will be the starting point for a new multi-year budget covering three years (in addition to the initial programming two years), 2017 to 2019. Adjustments to the distribution of appropriations per mission will be possible for the first year of the new programming (2017), while respecting the overall requirements of the initial multi-year budget.
The diagram below illustrates the different levels of programming rigidity:
You can view the image in the facsimile of the
JOno 0301 of 30/12/2014, text No. 1
The diagram below illustrates the linkage of the various multi-year budgets:
You can view the image in the facsimile of the
JOno 0301 of 30/12/2014, text No. 1
Each year, the Government shall prepare and transmit to Parliament, no later than before the policy debate on public finances under section 48 of the LOLF, an assessment of the adjustments made in relation to the ceilings set out in the multi-year budget, both with respect to the overall expenditure ceiling and the ceilings per mission, in accordance with section 33 29 of this Programming Law.
IV. - Rules of operation of the three-year budget
The success of the three-year budget is based on rules that manage the uncertainties inherent in multiannuality. These rules must reconcile two requirements: on the one hand, ensure sufficient visibility to managers and, on the other hand, ensure strict compliance with the expenditure standard, in order to ensure compliance with the public account recovery path.
This Part sets out the modalities for the operation of the multi-year budget.
A. - An essential operating rule: the implementation of the self-insurance mechanism
Corollary of the visibility given on the triennial envelopes allocated to each mission, the principle of accountability of departments on multi-year ceilings per mission, or "self-insurance", is a budgetary governance rule at the mission level, which must ensure respect for the three-year budget ceilings per mission and thus the recovery path for public finances. In budgetary construction (for future budgets beyond that of 2015), as in management, this principle implies that the hazards or new priorities affecting the expenses of a mission are managed within the limits of its credits, either by redeployment of discretionary expenditures or by the realization of savings. These redeployments or savings must be implemented primarily within the program that supports new hazards or priorities. If not, they must be carried out between the programs of the same mission or, where applicable, on all missions and programs under the same Minister.
The implementation of the principle of self-insurance allows for limiting to exceptional situations only the adjustments that may affect in the course of the year the limits defined by mission or their revision in the context of the financial bills, as specified below.
In any case, in order to strengthen the logic of self-insurance and to encourage compliance with the programming, the excesses of appropriations made in year will not result in a downward revision of the available resources in year n + 1, e.g. by limiting the deferrals of year n to year n + 1 or by applying derogatory rates to reserve credits in year n + 1.
B. - Provision of funds
As in the previous three-year budget, the 2015-2017 triennial budget does not provide any budget allocations. The budgeted credits on the "Tarths" mission are mainly intended for accidental and unforeseeable expenses, whose appropriations are distributed by decree in accordance with Article 11 of the LOLF.
This is due to the unprecedented ambition of the 2015-2017 multi-year budget in terms of spending control, which results in a net decrease in spending "out of debt and pensions"; this constraint higher than in the past does not allow for additional margins. Conversely, it must lead to giving the principle of "self-insurance" its full scope.
The precautionary reserve established in accordance with the rules laid down in Article 51, paragraph 4 bis, of the LOLF allows, for its part, to cope with important hazards occurring during management. It remains necessary in the context of the multi-year budget and will be, as today, constituted at the beginning of management by applying differentiated reserve rates on title 2 and other titles of the general budget programs.
In order to ensure the fair and equitable constitution of a sufficient reserve to deal with management hazards and to ensure compliance with the public account recovery trajectory, this Programming Law specifies, in its section 12, the minimum rates for limiting credits.
C. - Compliance with "0 volume" and "0 value" rules in the event of changes in inflation, debt and pension assumptions
The programming set for the years 2015 to 2017 by section 13 of this Programming Act meets the objective of volume stability on the perimeter of the extended standard based on inflation, debt and pension assumptions presented in this annexed report.
However, these are likely to evolve by the development of the post-2015 finance bills. However, regardless of these assumptions and their variation, the spending limits resulting from the application of volume stability rules and non-debtedness and pensions rules will be respected, with the most restrictive rule of both being retained for each year. Thus, in 2017, the strict application of the decline in value is more binding than the volume stability, the credits covered by the latter will indeed decrease by the order of 20 Md€ regarding the LFI 2014.
In the following years, if the cost estimates for the debt burden and pensions permit, the overall ceiling of credits will be revised downwards from that determined in the field of total expenditures, which will contribute to the state's debt.
Conversely, if the changes in inflation forecasts, debt and pensions no longer allowed to meet the overall ceiling of total expenditures, and even though the credits on the "out of debt and pensions" perimeter would meet the expected decrease, the ceilings on mission appropriations would be revised downwards to limit inflation to the increase in total expenditures.
Annex 3
Methodological and conceptual changes related to the application of new national accounting conventions
A new European System of National Accounts (SEC), SEC 2010, applies to all Member States as of September 2014. The INSEE advanced this change during the 2013 annual accounts publication on May 15, 2014 (15). SEC 2010 replaces SEC 95 previously in force.
I. - Upward revision of GDP
The application of the 2010 SEC resulted in an upward revision of the level of gross domestic product (GDP) primarily as a result of the accounting for research and development expenditures. Thus, the level of GDP in 2010 was revised to €1,998 billion in the accounts published on May 15, 2014, compared to €1,937 billion in the notification.
II. - Treatment of tax credits
Tax credits were treated in SEC 95 in less public revenues, for the budgetary amount of the tax reduction generated. In SEC 2010, the tax credits known to be replenishable (16) are now recorded as a surplus of expenditures (17) and revenues are no longer reduced by the financial impact of these tax credits.
The amount recorded in expenditure is the full amount of the debt recognized by the tax administration and not only the amount charged or returned. For most tax credits, the amount of the debt is generally equivalent to the budget amount, either because the restitution is immediate, or because the devices are in a "cruising" regime. Thus, this methodological change has consequences on the public balance only for two tax credits: the research tax credit (IRC) and the employment competitiveness tax credit (CICE). The registration takes place the year of recognition of the debt by the tax administration, even if the company uses its debt to pay its corporate tax over several years. For example, the CICE for the 2013 payroll is registered in the national accounts in 2014, the year of its declaration by the companies.
In total, the amount of revenues and expenditures of public administrations (APU) is increased from the amount of tax credits (+€15.5 million on the expenditure in 2013 and +€14 million on revenues, all other things equal).
However, the rate of mandatory levies remains calculated net of tax credits to remain close to the actual tax charge borne by economic agents.
For reasons of legibility, in particular in the CICE's upward phase, it is the evolution of the public expenditure excluding tax credits that is highlighted in this Public Finance Programming Act and in its annexed report.
III. - Soultes
The reliefs (18) were previously recorded as public revenues the year of their payment. In the 2010 SEC, the amount of a relief is spread over the entire pension payment period.
This new treatment degrades the balance in the year of the payment of a relief (seule a fraction of the relief, and not the totality, is recorded as a recipe that year) but improves it in the following years. The maximum negative impact is - €7.1 billion in 2005, year of payment of the electrical and gas industry relief. Conversely, in 2013, all the souls (19) improved the balance of €0.5 million.
IV. - Research and development (R詩D)
The expenditures of R✱D are now recorded in investment rather than in intermediate consumption. There are two cases:
(i) When an external purchase is made, the composition of the public expenditure is changed (the corresponding amount is recorded in investment rather than in intermediate consumption). This movement is neutral to APU expenditure and revenues.
(ii) When the R✱D is produced by a public administration, the production of R♣D is a production for clean end employment. An investment expenditure is also accounted for in duplicate the actual expenditures incurred, in order to reflect the fact that R✱D creates a physical capital. To neutralize the effect on the balance, an operation of the same amount, also fictional, is recorded on the revenue side.
This treatment, at the same balance, leads to an increase in the amount of APU expenditures and revenues (in this case, non-mandatory revenues), of approximately €13 billion in 2013.
V. Military expenditures
Military-use equipment assets are now recorded in investment rather than in intermediate consumption. This new treatment changes the composition of the expenditure to an unchanged overall expenditure.
VI. - Alignment of the definition of the Austrian balance on the balance in national accounts
As of September 2014 (effective of the revision of Council Regulation EC 479/2009 of 25 May 2009 on statistics under the "EDP" procedure), the definition of the Austrian balance is identical to that of the national accounts balance. Therefore, the balance taken into account at the European level will no longer be corrected for gains and losses on swaps. The disappearance of this correction results in a deterioration in the public balance of €0.5 million in 2013.
(15) See the INSEE note of May 15, 2014 " The national accounts are based on 2010: http://www.insee.fr/indicators/cnat_annu/base_2010/methodology/national accounts-base-2010.pdf (16) According to INSEE, "the European System of Accounts 2010 distinguishes two kinds of tax credits: restituable and non-restituable credits. A tax credit is said to be “restituable” if the taxpayer can obtain a refund from the State when the tax benefit exceeds the amount of tax due. For example, the employment premium is a restituable tax credit because even low- or non-taxable households can benefit in the form of a State payment. Conversely, the tax reduction for donations to works is “non-restituable”, since it cannot exceed the tax due and therefore does not give rise to any refund. " (17) Depending on the nature of the tax credit, reclassification takes place in subsidy, social benefit or investment assistance. (18) Amounts paid by an entity for a one-time contribution, amounting to any account balance, to the future pension expense of its employees. Transfers received are: (i) France Télécom's pension plan transferred to the state in 1997, for CHF37.5 billion; (ii) Electrical and gas industries (IEG) transferred to the NAVC in 2005, for a relief of €3.1 billion paid immediately, plus the payment for twenty years of the forwarding rate contribution (CTA); (iii) La Poste Pension Plan transferred to the State in 2006, for €2 billion.
Annex 4
Major definitions
The concept of "public administrations" (APU) is defined in Article 2 of Protocol No. 12 on the procedure for excessive deficits, annexed to European treaties, that is, "the central administrations, the regional or local authorities and the social security funds, excluding commercial transactions, as defined in the European integrated economic accounts system"(20).
The notion of mandatory sampling (PO) was initially proposed by the Organisation for Economic Co-operation and Development (OECD) and is based on three criteria: the flow must be actual payments, the recipients of these flows must be the APUs and, finally, these payments must be "non-voluntary" (no choice of the amount and terms of payment, no immediate counterparties). Within the European Union, the notions of taxes and social contributions are defined according to precise and binding criteria for member states. In France, the National Institute of Statistics and Economic Studies (INSEE) is responsible for the classification of a sampling in the PO category. The concept of new measures in mandatory levies, which corresponds to the effort in revenue, is defined as the new social and fiscal measures decided or implemented by the APUs, voted by Parliament or taken by regulation, which change mandatory levies (including the impact of tax credits).
In order to avoid the effects of the economic cycle, and to avoid the procyclical effects of a piloting by the nominal public balance (i.e. avoiding an expansionary fiscal policy when the conjuncture is favourable and tax revenues are dynamic, and inversely a restrictive policy at the bottom of the cycle), the States of the Unioncré signatories of the treaty on stability, coordination and governance within the Economic Union
The equilibrium rule is considered to be met if the annual structural balance corresponds to the medium-term objective (MTOM). Each Member State sets in its Stability Programme this MMT, which must meet a higher structural deficit limit of 0.5 per cent, or 1 per cent for States with a debt ratio significantly below the benchmark value of 60 per cent of gross domestic product (GDP) and whose risks to the sustainability of public finances are low. In French domestic law, the OMT is regulated by the Public Finance Programming Act (LPFP). The Commission considers the WMO as part of the review of the stability program and the adjustment path to this objective. In addition, pursuant to Article 2 bis of Council Regulation (EC) No. 1466/1997 of 7 July 1997, referred to above, the WMO is set at a level of structural balance that guarantees "the sustainability of public finances or a rapid progression towards their sustainability, while allowing a fiscal space, taking into account in particular the needs for public investment". The code of conduct for the application of the Stability and Growth Pact states that the medium-term objective is differentiated by Member States to take into account the diversity of economic situations (including the volatility of the production gap) and public finances and the risks associated with sustainability (in particular the level of debt and the evolution of future expenditures related to ageing). The WMO established by France in this programming law is defined in section 2 of this Act.
The structural balance is intended to separate the portion of the public balance that is directly dependent on the situation of the independent balance. Thus, the calculation of the structural balance is based on the definition of the economic cycle, and therefore the difference of the actual GDP to the potential GDP, called the production gap. Each year, the public balance may be broken down into: (1) a connective component that reflects the impact of the position in the cycle on the revenue and expenditure items assigned to it; (2) point and temporary measures (one-offs), which, because they do not affect the long-term deficit, are excluded from the assessment of the structural balance (see annex 5); and (3) from the structural component (see box infra).
The assessments of the structural balance and structural efforts require the estimation of the "potential activity" (or potential GDP) of the French economy: this is the level of activity that would be observed in the absence of tensions on the use of productive capacities, and which therefore corresponds to a tendential growth that is not subject to the fluctuations of the economic cycle. It is estimated from a projection of the tendancial gains of productivity and the potential supply of work, the latter dependent on demography, activity rates and structural unemployment. The term "potential growth" refers to the evolution of potential activity.
Structural adjustment (defined as structural balance variation) is not entirely discretionary in nature. Some elements escape the direct control of the Government and Parliament, such as the over-reactions of revenues to GDP evolution and the evolution of non-tax revenues (such as dividends). In detail, structural adjustment is broken down into a revenue effort, an expense effort, a non-discretionary component and the contribution of the key to tax credits.
The revenue effort is defined as the amount of new measures in mandatory sampling (excluding one-offs). The definition of the revenue effort is unchanged from the previous programming law. The expenditure effort is defined as the contribution of the gap between the growth of the real public expenditure (excluding tax credits, out of one-offs, out of the impact of the current on unemployment spending) and the potential growth of the economy. The definition of the expenditure effort is unchanged from the definition in the previous programming law. The non-discretionary component, excluding Government control, is defined as the effect of the shift observed between the spontaneous elasticities of the revenues and the usual elasticities to which the evolution of the non-mandatory revenues is added. The definition is unchanged from the previous programming law. The new accounting policies of SEC 2010 (see Appendix 3), lead to adding an additional term to treat tax credits. In fact, tax credits in national accounts reduce the mandatory levies of the amount of their impact on tax revenues ("budgetary"), but contribute to the public balance at the level of their debt ("recorded rights"). Therefore, in order to maintain the revenue effort unchanged and its consistency with the concept of mandatory sampling rates and new measures, as well as the other components of the above-mentioned structural adjustment, an additional term appears in this decomposition: this is the term of variation of the difference between the budget cost and the cost in national accounts of the restituable and deferable tax credits.
In addition to this new decomposition related to the 2010 SEC transition, the current methodology for calculating the structural balance differs from that used for the previous PSL only on two aspects developed below. For the calculation of the structural balance and as a result of the conjuncture balance, a tax-tax approach is retained, since the reaction of taxable bases to the conjuncture can be very different depending on the taxes considered: elasticities estimated at the specific production deviation for the ISI, IIR and CSG, social contributions and other mandatory levies are therefore used. The infra box specifies the calculation in detail. The OECD updated the elasticity of mandatory sampling in the summer of 2014 (21) and the Commission announced that it would use these new estimates this fall. The elasticities used have been revised accordingly to resume those of the OECD and are presented in the following table:
Elasticities away from production
| Income tax | 1,18 | 1.86 |
| CSG | 0.825 | 1.86 |
| Corporate tax | 1.59 | 2.76 |
| Social contributions | 0.825 | 0.63 |
| Other mandatory samples (including VAT) | 1.00 | 1.00 |
| Unemployment | - 3.30 | - 3.23 |
Finally, in the previous programming law, it was taken into account the one-year delay in income tax (IR) and corporate tax (IS) revenues over their generator. This delay was intended to capture the specificity of perception of these two taxes. Three reasons lead to no longer taking account of these delays in the evolution of the balance. On the one hand, it appears that these delays are in practice of a limited impact. On the other hand, this simplifies the analysis of structural balance and structural adjustment (22). Finally, this approach is similar to the methodology followed by the European Commission.
Box: Method of calculating structural balance (23)
The structural balance is the balance that would be observed if the GDP was equal to its potential. It corresponds to the corrected public balance of the effects of the economic cycle and its calculation is therefore based on the difference between the actual GDP noted Y and the potential GDP noted Y*.
In terms of expenditure, only unemployment costs are assumed to be cyclical. The rest of the expenses are supposed to be structural, either because they are of a discretionary nature, or because their connection to the situation is difficult to measure. In terms of income, it is assumed that all mandatory levies (income tax [IR] and general social contribution [CSG], corporate tax [IS], social dues and other mandatory levies) depend on the economic situation while the rest of the revenues (such as dividends paid to the State) are assumed to be independent in the economic position in the cycle.
For each category of mandatory R samplings, the Rs structural component can be written according to conventional q elasticity at the production gap:
You can view the image in the facsimile of the
JOno 0301 of 30/12/2014, text No. 1
The total of structural revenues is therefore obtained as the sum of structural revenues, calculated Rs (for the four categories of mandatory cyclical levies: IR and CSG, IS, social dues and other mandatory levies), combined with the rest of the revenues.
Structural spending is the difference between actual spending and structural spending related to unemployment, Dscho. These are determined in the same way as for structural revenues, depending on the conventional elasticity and unemployment costs to the production gap.
You can view the image in the facsimile of the
JOno 0301 of 30/12/2014, text No. 1
The difference between structural expenditures and structural revenues is structural balance Ss. Finally, the ratio of structural balance to potential GDP in value holds the GDP deflator.
Annex 5
Perimeter of exceptional and temporary measures to be excluded from structural balance
In order to deal with exceptional measures that temporarily alter public balances, the Stability and Growth Pact introduced, as of its 2005 revision, the concept of exceptional and temporary measures that do not have a lasting impact on the public deficit, one-offs. This concept aimed to cope with the multiplication of very large-scale events that greatly affected the reading of the balance of public finances. The structural balance is thus defined as the corrected public balance of the effects of the economic cycle and those measures.
I. - A general definition difficult to determine
Public finances are the result of a multitude of temporary and exceptional events. It is therefore difficult to distinguish what can be considered a one-off element and what falls within the ordinary domain.
For example, many public investments are by nature "unique" expenses: the construction of a high-speed road, school or line. However, it would not be possible to exclude investments from the structural balance as they represent an annual amount of about 4% of GDP.
This is more general in terms of public finances: the costs of external operations (war, foreign operation), expenses in the event of natural disasters, the triggering of guarantees, can represent important amounts, sometimes temporary, that it is difficult to characterize.
In the face of the difficulty of the general definition of the concept, the European Commission has gradually developed a theoretical list of one-offs potential, which it does not systematically follow.
The European texts do not contain a precise definition of one-offs: the pact of stability and growth merely mentions that the reliefs, that is, pension bond transfers, are part of it. It is the code of conduct of the stability program that tries to clarify the concept, defining it as one-time revenues or expenses "that do not alter the fiscal situation of long-term public finances". Examples cited include exceptional expenditures in the event of natural disasters or exceptional events (military action) and reliefs collected in transfers of retirement commitments.
The Commission explicitly acknowledges the difficulty inherent in handling this concept. In a 2006 publication (24), she noted, among other things, that a one-off could only have a temporary influence on the deficit, and should not be recurring (25).
The Commission ' s list has two characteristics: it is explicitly non-exhaustive and non-systematic. This is only an "indicative list of categories of transactions that can be considered exceptional and temporary measures" (26). As an illustration, the measures cited in the Commission's indicative list were not corrected in one-offs:
- real estate sales have never been processed in one-offs by the Commission in the case of France;
- in 2012, the European Corrigendum Budget Decision for 2012, which degraded the public balance ex post in 2012 (the payment was made in 2013), was also not classified as one-off by the Commission.
In practice, in the face of this lack of a legally binding definition of one-offs at the European level, the Commission therefore adopts a case-by-case approach.
II. - The doctrine proposed by the Government
In response to the request of the High Council for Public Finance, the Government proposes a set of criteria to better understand the concept of one-offs. Three sets of one-offs can be cleared.
A. - First set: systematic one-off measures. They must be defined under the five principles. In practice, no action follows all of these principles in SEC 2010
(1) The event concerned should not be recurring
A specific category of events should not be systematically excluded. For example, debt transfers to foreign states are frequent in France, notably within the framework of the Paris Club and its development assistance policy. A systematic exercise of such operations would bias the measurement of the deficit. Such an approach is also valid for expenditures related to natural disasters or external operations. Operations that fall under the normal management of the state's non-financial heritage (public investment, real estate assignments, intangible heritage management such as hertzian frequencies) are also not intended to be systematically corrected in one-offs. Only one case-by-case analysis would remove those whose magnitude distorts the reading of the public deficit.
(2) For a given year, the number of one-offs must be limited to avoid biasing the measurement of the public deficit
This principle is a security guard against the large number of "exceptional and temporary measures" that speed up the evolution of a budgetary balance. It avoids a large number of events in one-offs, which would have the effect of focusing attention on one-off classification rather than on public finances.
(3) The event must result in a significant budgetary impact
It is therefore necessary to consider only factors that may potentially represent an important amount.
(4) Any event that improves the balance today to systematically degrade it in the future must be considered a one-off
The events that spontaneously qualify for one-off treatment are indeed those that correspond to an important recipe that is being made in return for future expenditures: in SEC 95, it was the case for the reliefs related to the resumption of future pension payment obligations (the administrations recover once a compensation corresponding to the present value of future imbalances). However, since the issuance of the 2010 SEC accounts, the highlights no longer improve the deficit in one time but over many years.
(5) One-off measures should not concern the method of tax calculation
The Government has not taken up the Commission's approach, which corrects certain new measures when it considers their non-perennial returns: for example, the case of revenues that report more the year of their implementation than on a permanent basis.
The sharing line may be difficult to determine when there are many new measures each year.
In addition, such a choice does not allow for a simple and transparent treatment of different new measures. For example, an increase in ISI whose impact is stronger in the first year due to the mechanics of tax can be considered by the Board as exceptional and temporary. Conversely, a gradual increase in social contributions in the mid-year period (with a two-year increase) is dealt with by the Commission on a sequential basis.
In total, while only the reliefs were previously included in the list of measures still considered one-off, in SEC 2010, more measures should not be considered systematically as such.
Set 1: Measures systematically considered one-offs:
PSL 2012-2017 (SEC 95): Soultes.
PSL 2014-2017 (SEC 2010): None.
B. - Second set: in public finance programming laws, events with a substantial budgetary impact and uncertain temporality are classified as one-offs
At the time of multi-year programming, specific consideration should be given to known ex ante elements, whose uncertainty surrounding the amounts concerned or the occurrence or imputation dates is important. This logic prevailed in the one-off treatment of serial tax litigations whose instruction is underway. At the time of the previous programming, the amounts concerned were important and there was a high degree of uncertainty about temporality and disbursement. This uncertainty is still current. He was chosen to maintain this treatment. This uncertainty should not bias the measurement of the structural balance, which is the case since the amounts are already provided in the initial trajectory.
Ensemble 2: Significant financially but uncertain events in terms of temporality, considered one-offs upstream of the programming laws:
PSL 2012-2017: mass tax litigation.
PSL 2014-2017: mass tax litigation.
C. - Third set: as part of ex post control, unforeseen events that have a unique impact on the public balance can be treated in one-offs
The treatment of unforeseen events within the framework of ex post control should be assessed under the organic rules relating to the mechanism for correction of deviations.
If, in the course of programming implementation, events appear that could not have been anticipated ex ante and are of very large size and that they do not alter the medium-term trajectory, it seems unnecessary to take steps to correct deviation in view of this temporary nature. From the perspective of organic rules, it is pragmatic to treat it in one-off to avoid unnecessary triggering the correction mechanism. For example, the Government - like the European Commission - has treated in one-off the recapitalization of Dexia in late 2012.
The size and non-permanent criteria are essential. Thus, while Eurostat changed the accounting treatment of the European Union's revenue collection at the end of 2012, the Government did not propose to deal with it in one-offs while it increased the deficit 2012 (€600 million net). Although their unpredictable nature would lead to correction of one-off rectificative budgets, the Government had chosen not to do so.
Set 3: Unforeseen events to integrate as one-offs ex post:
PSL 2012-2017: No ex ante definition. Only Dexia's recapitalization intervened as one-off ex post.
PSL 2014-2017: No information at this stage. Exceptional and not anticipated by nature.
Annex 6
Table of passage between the provisions of the Organic Law on the Programming and Governance of Public Finance and this annexed report
| 1° The assumptions and methods used to establish the programming | Consolidated report, including part I on the macroeconomic context |
| 2° For each of the years of the programming period, the outlook for revenues, expenditures, balances and debts of public administrations and each of their subsectors, expressed in accordance with the national accounts conventions | Parts II and III: The trajectory of public finances and subsector analysis |
| 3° For each of the programming period exercises, estimation of old-age insurance expenses and estimation of family allowance expenses | Part III C.2: Old Age Insurance and Family Allowance Expenditures |
| 4° For each of the years of the programming period, the outlook for income, expenses and balances of the supplementary pension plans and unemployment insurance, expressed under the national accounts conventions | Part III C.3: Expenditures for Supplementary Pension Plans and Unemployment Insurance |
| 5° Measures to ensure respect for programming | Part III (the trajectory of public finances by subsector) |
| 6° Any other information relevant to the monitoring of compliance with the ceilings and objectives referred to in 1° and 2° of Article 2, including the principles for comparing the amounts that the Public Finance Programming Act provides with the amounts set out in the financial laws of the year and the social security financing laws of the year | Part III (the trajectory of public finances by subsector) in particular III.A part "Passover LPFP-PLF" and III.C part "Passover LPFP - PLFSS) |
| 7° Public finance projections with unchanged policies, as defined in Council Directive 2011/85/EU of 8 November 2011, on the requirements for the budgetary frameworks of the Member States, and the description of the policies envisaged to achieve the medium-term objective with respect to these projections | Part II A.2 |
| 8° The amount and the due date of significant financial commitments of the current State having no immediate implication on the structural balance | Part III A |
| 9° The modalities for calculating the structural effort referred to in Article 1, the distribution of this effort between each of the sub-sectors of public administrations and the elements for establishing the correspondence between the notion of structural effort and that of structural balance | Part II A.3: Evolution of the structural balance and structural effort of public administrations.) and III |
| 10° Potential gross domestic product assumptions for public finance programming. The report presents and justifies any differences from European Commission estimates | Part I C (potential gross domestic product assumptions and justification of deviations from European Commission estimates) |
| 11° Assumptions that allowed the estimation of the effects of the conjuncture on public spending and revenues, including the assumptions of elasticity at the conjuncture of the different categories of compulsory levies and expenses of compensation for unemployment. The report presents and justifies any differences from European Commission estimates | Part II A.3: Evolution of the structural balance and structural effort of public administrations. ) |
| 12° Methods for calculating the annual structural balance referred to in Article 1 | Part II A.1: Evolution of the structural balance and structural effort of public administrations. ) |
| This report also presents the situation of France with regard to European strategic objectives | Part II A.5: The European framework |
Done in Paris, December 29, 2014.
François Hollande
By the President of the Republic:
The Prime Minister,
Manuel Valls
Minister of Finance and Public Accounts,
Michel Sapin
The Secretary of State in charge of the budget,
Christian Eckert
