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00:00Sébastien Lecornu is about to explain what he has decided to do to try to break the budget
00:06deadlock. He is about to speak. We will join him live now.
00:10Tell us how we can provide a budget to France, the timetable, after several days of constitutional
00:20debate. I made a number of commitments back in September, October, indeed all the way to December.
00:26I wanted to provide France with a budget in due time, that is prior to 31 December, where we were
00:33not able to meet that timetable, at least as far as the state budget is concerned. The social budget
00:40is another matter. I'll get back to that in a moment. We wanted the budget to have to hit the
00:46maximum 5 percent deficit. It now extends at 5.4 percent, but we were at six, upwards of six percent
00:54in 2024. So we have international commitments. We have commitments. This is our European partners,
01:00and this engages the very credibility of France's signature. We have to keep our words and stick
01:06to beyond, below 5 percent. On a more political and personal basis, I've made a commitment, indeed.
01:12This was a wager. I believe that after two votes of no confidence against the government, we had to
01:21govern differently. We had to share powers with local authorities. And indeed, a number of initiatives
01:28were made regarding decentralization with also social partners. There were tense labor situations back
01:38in the fall. There were union movements. There was industrial action that was difficult to manage.
01:44There were interventions from the far left as well. And of course, a lot of these movements were
01:53completely disaligned with political reality. I mean, there was a new balance within the National Assembly,
01:59and we had to govern differently. Well, that was the... Well, as I said, it was a wager. I felt that
02:07Parliament had to go all the way through the process, debates, votes, amendments, to arrive at a point of
02:15clarity. You shouldn't always blame others, not knowing who votes for what or who defends what convictions,
02:23what beliefs. Now, that way of doing things worked for the budget for the social security system.
02:34But at the National Assembly, that debate occurred with a peace of mind, quiet, constructive debate. And
02:47indeed, we're looking at 350 hours of debates since the beginning. This is huge. And plus, of course,
02:55hours behind the scenes for most meetings. And so we arrived at a first option and then a final budget
03:06that was voted for the social security system. And we drew a number of lessons.
03:11We learned from the previous governments of François Bayrou and Michel Barnier, the previous governments,
03:19because they were items of compromise. And sometimes we had to start Parliament debates with these options
03:27of compromise for the state budget. Things went well up until Christmas, but then things went wrong
03:33after Christmas. There was a clear divide between the upper and lower house. There was a joint committee
03:43that met for, what, 40 minutes. That gave you an idea of the ambiance. And of course, ministers don't
03:52sit on that committee. There were sessions between political leaders and ministers. We thought there was
03:58a way out. There were new debates in the National Assembly. But again, positions became tighter. There
04:08were attempts of pressure and sabotage, indeed, from La France Insoumise, the far-left party. And then a
04:15number of political leaders had decided to leave the debate. Up until then, they had agreed to go on with
04:23the constructive debate. The communists and the ecologists, they initially started to work with us.
04:29But then for reasons that are, well, their reasons, I respect their decision, but I don't understand this,
04:34they decided to walk out of these meetings. And so things got into a quagmire of sorts, bogged down.
04:42And that was a rather peculiar situation. Here we have a government that wanted debates to go to their
04:48logical conclusion, final conclusion, and parliamentarians decided against, decided they
04:54should not continue the debate. And so, together with our ministers last week, we had basically four
05:01options on the table. Number one, not to change the strategy, just remain stubborn. Some said that. We said,
05:10well, we won't go through this parliamentary process. We need to have a vote at the end,
05:18i.e. have a sort of a shuttle diplomacy between the Senate and the National Assembly. I sent a
05:27bill to the Senate, it going back to the National Assembly. And at the end of this long process,
05:34and public opinion was there to witness, it was called to witness, saying that, well,
05:39maybe at the end of that long process, maybe we might arrive at a budget, maybe in May or April,
05:46probably not within a 5% deficit. Now, and here, I have to be blunt, I thought about that.
05:55But because we wanted a budget quickly, and we wanted to remain below 5% deficit,
06:01and of course, in my position as previous defense minister, I was really very much concerned about
06:10the budget situation, because we have an international situation here. And so, that
06:16road was probably not the right one, because it would simply show stubbornness. The second option is
06:22no budget at all. And some actors of the chaos, we're trying to avoid chaos, of course, but some people
06:29might actually fancy that. And some will say that this special law, that is the emergency budget,
06:37can be a regular budget. That's lying to the French people. But of course, we would be caught up by the
06:44truth. And we would be, we would see this in terms of taxes and
06:51public procurement, and indeed France's position abroad. So, presenting the emergency budget as a
07:01lasting situation is absurd. And we won't do that, of course. And I made sure I talked to all political
07:11groups on the National Assembly, including the opposition, trying to remain constructive.
07:16And of course, we still want to defend the national interests. Well, political parties, no, we can't
07:23have that. We need an actual budget. Indeed, some political parties that publicly walked out of the
07:30debate said, no, we can't go that way. So, that leaves us with just two final options. And that was part of
07:38the, well, provided for in the initial 1958 constitution, either ordinance, the government
07:46decree, or Article 49.3 of the constitution. But that provided, of course, we needed to have all the
07:53wherewithal for this to happen. And so, having given the matter due thought, and I must say,
08:00in a personal capacity, and I must say, there's some bitterness this, but I will call for a vote of
08:08confidence on the matter of the income part of the budget. Now, I do this reluctantly, because it
08:18means I have to go back on my word. But to stick to my word, I would have to be, as I said, stubborn.
08:24And that is the one thing I do not wish to do. Not for egoistic reasons. I do not want to remain
08:35stubbornly on that position. We need to find lines of compromise. We need to work as seriously as
08:41possible. We have to keep government as far away as possible from anticipated presidential elections,
08:48and avoid sort of chaos that some parties relish. And I've heard this on TV and elsewhere. If I
08:58remain too stubbornly close to my initial positions, I would be the cause of problem. Now, some political
09:05parties, even though they ran for the general elections and they wanted a budget, well, they
09:12decided not to take part in the debate. You can very well vote against, but it doesn't mean you should
09:19make sabotage operations. And there were operations of sabotage. And we found with a number of ministers
09:26that it seemed that no rules held anymore. Now, just because you call for a vote of confidence doesn't
09:33mean we don't compromise and we don't want debate. And that is indeed the reason why last week,
09:40starting on Friday, I started to come up with a sort of the final version of a draft budget. But
09:47having learned the lessons from the social security budget, which is a budget covering a number of
09:55provisos, but for youth, for entire industries facing crises, and in particular for the housing
10:03industry, but indeed regarding people working or future workers, students, we needed to improve on
10:13the initial draft. And I would like to thank my ministers because the many weeks of thought
10:19bore fruition. We were able to find what we could and what we could not agree to, what were the new red
10:29lines. And indeed, there were budget debates. Indeed, some choices might have dangerously harmed
10:37the production tools. But here, we kept, we stuck to our guns. There were items that were open to
10:45discussion and others where we held firm and we would hold firm. And indeed, there were some chapters not
10:52open for discussion. And that brings me to another matter, but ministers can also address this. And
11:01maybe I wasn't very clear this morning, so this is my chance to make things clear. We will remain
11:07below 5% deficit. You'll get all the numbers during the week, as provided by parliamentary procedure. We
11:16will have a fair budget that's below 5% deficit. And the other thing is we were looking for a tax
11:25stability, which is not to say that we won't use tools to fight fiscal evasion or tax income over
11:35assessment. Some parties are against this, but we believe that the rules must be the same for all
11:42taxpayers. Otherwise, consent to paying taxes no longer holds. Anyway, taxes on households will remain
11:53the same in 2026 as they were in 2025. All tax instruments on companies, 99.9% of companies,
12:04the instruments will be exactly identical in 2026 as they were in 2025. And that is one of the points of
12:11compromise we arrived at with the various political groups. Now, this is sort of a compromise draft.
12:19So it's nobody's actual draft. And so this is why we have to call for a vote of confidence on the
12:26matter. But we have to explain what's there, what's in that draft. We're, of course, still looking for
12:32growth. We're looking for political stability. And indeed, political stability will help us there.
12:36We'll see this in the days to come. Some visibility on tax matters. And there were lengthy debates in
12:43parliament. And you read all about it in papers. And there were concerns about this. But now we have
12:48something that's much more clear. And on the basis of all this, of course, other items will become
12:55clarified as we talk to parliamentaries. And the Ministry of Finance will be in touch with the
13:03committee rapporteurs. There are still discussions going on, on a number of issues. But one thing is
13:08for sure, it is also for parliamentarians to take on their own responsibilities.
13:15Are we going to start a crisis? Or after a lengthy effort of compromise? And I think that's the only
13:24option we could go through. Are we coming out of this long process? Or are we going to dive again
13:32into a world of risk and uncertainty? Of course, we don't want that, especially at a time when
13:39international events are catching up with us. And this, of course, has an effect on domestic policies
13:45as well. Now, if you like, I can take your questions now. Prime Minister Bastien Thierry,
13:56you said yourself you would renege on your promise not to resort to 49.3. Is that your failure,
14:04the government's failure? And might this not jeopardize the state's credibility? Well, it's
14:14half a success and half a failure. We arrived at a budget for social security. Nobody believed this.
14:20And the big advantage of this is that at least calm can be restored in political life. But this was a
14:28waiter. Remember, some political forces wanted us to resort to 49.3. And the lines have been moving
14:37because everybody has arrived at the conclusion that otherwise we're going for a dead end. Now,
14:44we don't know the answer now. We'll know in two weeks' time whether this is a complete failure or not,
14:50because the government's first mission is to provide the nation with a budget. I mean,
14:55that is our purpose. And in the many statements I've made, my intention was clear. I had to arrive
15:02at a budget and giving up on 49.3 was one of the conditions. But now we find that it's the other way
15:09around. We need 49.3 to arrive at a budget. I'm not being stubborn here. Is that my personal
15:15conviction? No, I still believe that a parliamentary democracy should gain maturity. And after a while,
15:21eventually you turn to the executive branch, and that is no solution. I've traveled around the world,
15:30and I've traveled around Europe, and there are parliamentary democracies we could learn from,
15:36perfectly compatible with our own Fifth Republic. I'm a Gaulist. I want to defend the Fifth Republic.
15:43But many of those advocating the Fifth Republic are believers, but not practitioners.
15:51Prime Ministers, this budget you've been concocting with a number of parties, the Socialist Party,
15:58the left wing, is that a deal to not arrive at a vote of no confidence? Are you confident that there
16:05will be no vote of no confidence against you? And don't you believe that additional debates won't
16:12go on for weeks to come? Well, there's no guarantee there. And I don't like partisan talks. I tend to
16:24try to keep political parties away from discussions within government. There are no secret deals,
16:31backroom deals with political parties. There are technical meetings. There have been technical
16:37meetings for weeks. There have been amendments coming from the Parliament, and we find that there's a
16:43possible convergence. So what we've been doing since last Friday was to come clean. And before the French
16:51people, we come up with a draft budget which, to us, seems the best for the country. And that is why
16:57I took this upon myself. It's true, the Socialist Party had asked to talk or requested. Other
17:05political parties as well also had requests. And under the previous government, there were
17:15amendments made in favour of labourers, people barely making the minimum wage. We felt that they should
17:23get a little boost for purchasing power. That's going the right thing. I'm not saying that we can
17:29increase wages every other minute. But we had to make a gesture. Likewise, the Gabriel Attal's
17:36government wanted Social Security charges to be reduced to make the cost of labour less expensive. And we did
17:45just that. Likewise, there was talk of chasing deals in the housing industry to make things more
17:56easy for homeowners. And Laurent Wauquet had his own position saying that the taxes for households should
18:06not increase. And we went along with these ideas as well. There will be no increases on household taxes.
18:15But this requires, I mean, this sort of work requires a lot of thinking, a lot of thinking and calm. But
18:23it's all very well when you arrived at the final budget for people to say, oh, but that's your left
18:30leaning or your right leaning. And it's often the same people who never attended the meeting, never
18:37took part in the debates. Then suddenly they come up with their criticism. And they run for the
18:43election as well. And yet they did not participate in that work. Here, we did our homework. We arrive at
18:49a tax which doesn't run away with the tax madness. We have, well, we do need income for the state.
19:00We find that 99.9% of companies have companies that are spared by this. And for the remaining
19:06companies, we have reduced the tax base. And in fact, any savings are going to help the defense
19:13industries. I think we have to be a bit patriotic here. Anyway, this is a compromise tax. Nobody wants to
19:20sign on to this 100%. So I put this before Parliament. And I call for a vote of confidence
19:27on this because we don't want to make fools of ourselves in front of the whole world. We need
19:34to arrive at a budget for the nation. Prime Minister, sir, from France Television.
19:42Just now, you said there will be an additional tax for large companies, the corporate income tax,
19:48but does not jeopardize the competitiveness of such companies if they are burdened with a higher
19:57corporate income tax. And you said that you're going to remain below 5%. What savings are you going
20:02to achieve? Well, I'll let my minister on public accounts to say a few words about this.
20:11Thank you for this question on savings achieved. And that is an issue that was very much present in
20:18our debates. Initially, we had a budget which called for low expenses in the state. And we were able to
20:30do this in 2025. This is why we remain within 5.4% deficit. We completed the year within 300 million
20:41of the initial budget, where we're talking about billions here. So we were right on the dot.
20:46The Prime Minister confirmed this for 2026. All the budget lines, all the expenses and the income
20:54for central government, local authorities, all this will be monitored on a quarterly basis.
21:02There will be alert committees whenever we go out of line. And this draft budget to really stick to
21:09within 5%, where this shouldn't be only on the shoulders of the ministers. We're doing this in full
21:16transparency. Regarding the savings, we savings on operators and agencies. And we'll find that
21:21in an hour to come, you'll see that additional savings will be required from
21:25a number of public players to improve their cash position. We don't want...
21:32Welcome. You're watching France 24. You've been watching live remarks by the Prime Minister of France,
21:38Sébastien Lecornu, and his finance minister, Amélie de Montchalin. This, after his announcement,
21:45which he conceded as a half of a, as a partial admission of failure, is how he put it.
21:56They're going to be using Article 49.3 of the Constitution to pass a delayed budget. Let's listen
22:07a little bit more to the finance minister.
22:09We're also saving on critical items, public procurement. There were lots of stories in the
22:17media, but we're saying that public players have got to buy or pay more for their procurement
22:25than they should. We want to save a billion euros right there in public procurement. And that also
22:34includes communication expenses. And the savings achieved compared to previous announcements will
22:42enable us to remain, keep our expenses below the 5% deficit line. Regarding taxes, and there were quite
22:52a few changes since the 14th October draft and the one that we are finalizing right now, there will be no
23:01more taxes in tomorrow's draft as the one you had initially. The big difference, the big difference is
23:07that changes were made as to who will be paying more in 2026. Regarding households, there were talks
23:14about households, but also pensioners. There were issues of tax shields, et cetera. Exceptional provisions
23:25were removed so as to make sure that the tax effort paid by the nation should remain less in terms of
23:33GDP. The GDP percentage should be less in 2026 than it was in 2019. 2019 was the last year where we were
23:40below 3%. 2019 was the last year before the crisis of inflation, COVID and Ukraine.
23:49We were at 43%. Now we'll be at 43.9% of GDP. So we want to come back to the last year in our
24:02tax history where we were below 3%. You said you're going to be using the reserves, but will there be
24:08other savings as well? Well, we have 1.5 billion euros that ministries were hoping they would be able
24:14to spend that they will not be able to spend. And that is very significant. The French have got to
24:20understand when we're talking about savings, these are actual savings. We're not just, this is not
24:24bookkeeping fantasies. We're talking about real savings there in a few weeks' time. And I'm sure there
24:33will be a lot of questions to government in parliament about this regarding the measures, the
24:41provisions that will not be funded. But the self-same people that say we need more savings will be the
24:46same people asking for more spending. In what industries, what areas are you talking about?
24:51Well, the ministries, ministers will tell you more about this, but our commitment is to provide
24:57full funding for public services expected by the French. Now we're moving outside this sort of core
25:05system. The system will be savings on operations and organizations. And items that are under the
25:14direct supervision of the prime minister's office will also come under that savings, that savings ban.
25:22Thank you. Thank you all.
25:25Thank you, everyone. We could continue with the more formal part of our discussions.
25:41Since we're discussing the budget here and the prime minister and the public accounts minister just
26:00spoke, but there will be a vote of confidence asked regarding the present government. And to quote the
26:12president and regarding this draft budget that has just been mentioned here, this budget is the result of
26:22a political work which by definition required compromises, concessions on the part of
26:29everyone. The budget equation making it possible to keep the deficit below 5% of GDP to provide
26:41stability and be consistent with our economic policy. So this draft budget will enable the country to move
26:48forward. These are the president's words. So we've completed the roadmap. We've got to defend this and to arrive
26:56at a positive results. We have items to start the economy. There were tax incentives for housing.
27:09There are a number of items regarding the defense industries and the regalian functions of the government.
27:17And we find that you have corporate income tax that will be less.
27:25There you see the French government spokesperson, Maude Bréjean, flanked by the finance minister, Amélie de Montchalin.
27:31We've got to do the same thing. And that's all the work that you have.
27:43So you've got to do in the process.
27:44Go ahead.
27:46I'll answer that.
27:49You know,
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