France: Two urgent priorities for the 2025 Budget
2025 begins with a new French government and a new budget debate, but with the same challenge as last year: how to reduce the deficit without putting the brakes on investment in the climate transition? Climate investments are the best investments we can make, according to the new Minister of Economy Éric Lombard. He’s right: any delay weakens our energy security and our position in the international race for cleantech, not to mention the pace of decarbonisation of our economy.
There is a lot to be said and done when trying to reconcile deficit reduction (mainly through savings, as decided by the government) and continued investment in the climate. We first and foremost need to recognise that the two can only be reconciled up to a certain point! In view of the debates surrounding the 2025 Finance Bill in France, let’s focus on the most urgent issues: the electric vehicles industry and local authorities.
How to support the electric vehicle market at a time when the government wants to cut purchase subsidies (too) sharply and (too) quickly? Proposals include regulations on the greening of corporate vehicle fleets, which are lagging far behind households. MPs have put a number of ideas on the table, and the previous government itself tried to make progress on the subject as part of the Finance Bill.
The government’s latest announcements point to a relaxation of local authorities’ budgetary constraint, which is good news. But this will obviously not be enough to solve the financial equation for local climate investment. Let’s try to look at things in a positive light: the government and local authorities have given themselves another year to find solutions to this equation.
