By Laurence Daziano is a lecturer in economics at Sciences Po and a member of the Scientific Council of Fondapol
Fierce debates occur among the political class dominated by populist parties which represent more than 50% of voting intentions. The institutional instability caused by the Head of State’s decision to dissolve the National Assembly in 2024, contrary to the regulatory mechanisms of our institutions, has not finished producing results. This country is experiencing economic stagnation with growth of 1%, debt of 115% of GDP, the development of which cannot be avoided and is accelerated by the “snowball” effect, namely interest rates that are higher than economic growth. Paris now has the highest deficit level in the euro zone.
By the time the presidential election campaign begins in 2026, discussions should focus on ways to find, for our country, a potential growth path of 2 to 3%. Only a return to sustained and sustained growth can provide perspective to younger generations, finance our social model, and return to global competition against the United States and China. Mario Draghi’s report provides a solid basis for the necessary developments in the European Union and its internal market, in particular regarding European industrial policy or capital markets union. France must succeed in reducing its spending, carrying out state reforms and reorienting its economic model towards innovation and production.
However, the financial draft law for 2026 is contrary to our economic and budgetary interests. The PLF raised a number of taxes totaling around 40 billion euros, on top of the Government’s plan of 12 billion euros. When examining the text, the Senate should return to a copy that is similar to the Government’s copy. The Joint Commission must reach an agreement to provide France with a budget for 2026.
However, even by reiterating the Government’s guidance, PLF 2026 moves us further away from the need to return to the growth path. The previously extraordinary business surcharges were renewed with the corporate tax rate increasing to 35.6% on turnover of 3 billion. A tax on share buybacks has been voted on, as well as a 20 to 33% tax on “super dividends”, without knowing exactly what this covers. Finally, the “GAFAM” tax was doubled to 6% of turnover.
Everything is reversed in this draft budget. The government, which continues to increase public spending, has not started reducing spending, which is fundamentally important for our economy. Taxes have been raised on businesses that are the productive heart of the country. Regarding the “GAFAM” tax, its doubling sends a negative signal regarding innovation, the need to adapt our economy to digital challenges, and the added value that digital companies bring to our economy.
PLF 2026 projects, at this stage, a major financial shock for the country, and moves us further away from the reforms that need to be implemented to reduce public spending, reform productive systems and encourage innovation. Business, innovation and capital are overburdened and designated as “enemies” of the nation. It is time for us to return to peaceful and rational public debate, supported by objective data and taking into account developments in the world around us. We must return to the basics of public action and remember, as Frédéric Bastiat stated, that “ we can expect only two things from the State: freedom and security, and we cannot, at the risk of losing both, ask for the third. “.
