With the job losses salary increases of 4

The 2009 budget was published yesterday in the "Official Journal" and in the transmitted figures last week the European Commission, the Government plans for next year a public deficit at 3.9 of GDP. For 2008, the level is officially limited to 2.9, the Executive having choice to resuming a rate resulting from the budgetary texts (the 2009 budget, the funding of the Social Security Act and the 2008 collective) it comes to voting in Parliament. So far, Bercy is more illusion to the fact that the threshold of 3 allowed by the European stability pact will be crossed this year, in the light of the accumulation of bad economic news.

Bad surprise

If the result will be known precisely that in the spring, the Minister of public accounts, Eric Woerth, has not hidden to parliamentarians that the last payment of tax (IS), paid December 15 by companies, leaves augurer a bad surprise. While the product of the IS was already announced down 4 billion euros (on a total of tax losses of 7 billion) compared to the 2008 budget voted a year ago, it is not excluded that profits more than 3 billion additional or announced in the very next days. Which would be a down 13 53.8 billion euros IS expected initially. And Bercy cannot expect good surprises the other revenues, such as VAT, consumption is now just at the level anticipated. In oil taxation, after comfortable gains on the first three quarters, it may also be disappointing in the last quarter: the fall of prices at the pump will play negatively on VAT receipts, and net decline in sales of fuel observed this fall (particularly in November) will cause lower receipts of TIPP.

The situation is much more desirable on social contributions. With the job losses, salary increases of 4.25 on average in 2008, as the Government still hoped. Acoss (umbrella the Urssaf) now anticipates 3.7, which will be close to 1 billion euros of contributions under social security. Same result for the supplemental pension plans (Arrco, Agirc) and the Unedic, which provides for a surplus of 4.5 billion euros in 2008, against more than 5 billion advance a few weeks ago, the increase in the number of unemployed buy-offs with the slowdown of revenue. At this stage, the Government is less precise data on local communities, but these include very pessimistic on their revenues, rights transfer in real estate. In total, "there is little doubt that the 3 mark is breached in 2008", admits a government source.

Exceptional circumstances

The short term, the political consequences will be not critical. The European Commission and the European Council already announced that Member States could leave spinning their deficits during the crisis, for the exceptional circumstances provided for in the stability pact. Formally, Brussels is expected to open a procedure for excessive deficit, but it will not lead to binding recommendations. And even less to sanctions, as the France will be far from isolated. The Redoubt Government on the other hand a return stick in 2010. Once the crisis is past, the Commission will require a general consolidation of public finances. And the France, which will probably accumulated three years of deficits above the 3 (2008, 2009 and certainly 2010), will be very exposed.