As the debate over budget revenues rages and tensions build, a new tax of 40 billion euros could further falter France's already fragile economy. During an intervention this Sunday, October 27, Pierre Lellouche, former minister, sounded the alarm: “the French economy will suffer a shock which will stop it at the worst moment”. This declaration, which has serious consequences, comes in a context where economic recovery is more necessary than ever, but where the room for maneuver is shrinking day by day.
The 40 billion euro tax shock voted by the National Assembly
Last Sunday, Pierre Lellouche, former minister and recognized expert on economic issues, expressed his concern about the new budgetary decisions of the National Assembly. Thus, in a strong statement, he warned that “the French economy will suffer a shock which will stop it at the worst moment”, which refers to the 40 billion euros in additional taxes voted in a few days. These new levies are in addition to the 30 billion euros already announced by Michel Barnier in the 2025 budget, which thus increases the tax pressure on households and businesses. For Lellouche, this increase is not only “worrying”, but it could also stifle an economy which is already struggling to find its breath after months of crisis.
The immediate impact of these decisions is palpable: the French risk restricting their consumption even more, according to Lellouche. In fact, “the person who wanted to buy a sofa will end up giving it up, they will also give up going to a restaurant,” he said. declared during his appearance on the show Grand Rendez-Vous on CNEWS. This decline in consumption, which nevertheless constitutes a key driver of growth, could cause a domino effect on many sectors. Already weakened by inflation and a tense economic situation, French companies will have to face a significant reduction in demand.
An economy on the verge of stagnation?
The new taxes imposed by the National Assembly do not only concern the short term. With the addition of additional taxes, the government risks slowing down long-term investments by businesses, which could choose to postpone or cancel important projects in the face of this increase in taxation. “This is not the time to suffocate the economy,” warns Pierre Lellouche, stressing that France is already behind on its recovery objectives. The decline in domestic consumption, coupled with increased tax pressure, could have disastrous consequences on the country's competitiveness.
Beyond the immediate impact on consumption and businesses, these new measures also risk destabilizing employment. Indeed, a slowdown in economic activity could lead to workforce reductions, particularly in sectors most affected by the drop in demand, such as retail and hotels and restaurants. The outlook for 2025 is therefore particularly bleak, as the country is already struggling to contain a high unemployment rate. “If households and businesses stop spending, the economy can come to a grinding halt,” warns Lellouche.
The tax decisions taken by the National Assembly, although necessary to fill budget deficits, could cause a profound slowdown in the French economy. If support measures are not put in place quickly, France could see its economy stagnate, or even decline, with serious social and economic consequences. The debates on the budget will resume on November 5, but the first reactions already suggest significant opposition to these tax increases. We hope that cryptos, particularly Bitcoin, will not be subject to taxation.
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