2026 Budget: "There is no major reform," regrets economist Alain Trannoy

For Alain Trannoy, doctor and associate professor in economics, currently director of studies at the School for Advanced Studies in the Social Sciences (EHESS) and professor at the Aix-Marseille School of Economics, but also scientific advisor to France Stratégie, the plan remains unclear, particularly regarding the fate reserved for companies.

Is this a balanced plan? Savings on one side and production recovery on the other?

On this second point, I haven't noted anything! For example, there is no clarification on the fate of corporate taxes, which increased last year. Is what is being presented to us an exact copy of what currently exists? Or will the total amount spent – excluding defense and debt service – be identical? In the latter case, it means that the corporate tax increases introduced last year remain, even though they had slowed investment and were, above all, supposed to be temporary. It's unclear!

Are there any announcements regarding the fluidity of the labor market that could boost production?

The Macron five-year term began with this, notably with the El Khomri law, but we're finally back to square one. Regarding unemployment insurance, the Prime Minister is asking the social partners to get back around the table, even though an agreement was signed not so long ago... They would also have to come up with a new version very quickly, by the fall; that seems unlikely. As for the elimination of two public holidays, I absolutely do not believe in the idea of Easter Monday, which allows for three-day weekends to which families are very attached. I would have focused more on days that include long weekends, such as Ascension Day, for example.

Regarding taxation, are there several targets?

Retirees will be particularly hard hit. First, regarding pensions, which, if I understand correctly, are divided into three categories: the lowest, the medium, and the highest. There would be something to preserve the purchasing power of the first category, but more in the form of an allowance than an increase, meaning the amounts would not be sustainable over time. Then, the healthcare expenses deductible is increasing, which penalizes the elderly more, and the elimination of the 10% tax deduction that retirees receive for professional expenses is confirmed. Finally, the highest pensions will not benefit from any increase, and taxes will increase for this category.

As for some assets?

Yes, because if the tax scales are kept the same, due to the threshold effect, some French people will move up a bracket and pay more tax since the brackets are not being revalued. Currently, there is no inflation, and this is a problem for the state because its revenues are not increasing.

For you, there is no real reform announced?

No. There are two possible methods: either we cut back, or we look at where we can make savings and where it's important to preserve spending. Here, I don't think we're on the second option, with avenues for reforming the State, local authorities, and social security financing, but still cutting back. For example, this plan requires little effort from local authorities, whereas in a pre-election year, it wouldn't have changed much for them. But that's undoubtedly political: the Senate, which is the chamber of local authorities, plays a major role today. We're still in a parametric, cutting-back situation, even though we've been told about this presentation for six months. We're not preparing the ground for major reforms, so it will be up to the presidential debate to decide on them.