Projected Financial Plan 2026: Understanding the 'White Year' and Possible Frozen Benefits
2026 Budget: Is a "Zero-Out" Approach on the Table?
With the government gearing up for cost-cutting efforts in the 2026 budget, the buzzword doing the rounds is the "blank year." While Francois Bayrou's team hints at a budget cut of 40 billion euros, some have proposed a novel approach called the "Zero-Based Budgeting."
2026 - A Year of Adjustments?
Let's face it, times are tough and the government's under pressure to tighten its purse strings. After all, they're aiming to bring the annual deficit down to 4.6% of GDP by 2026 and dip below the 3% threshold by 2029. But how will they pull off this Herculean task? Their strategy, as of yet, remains elusive. Spicey rumors persist, particularly around the concept of the "blank year."
What is the "blank year," you ask? In essence, it's keeping the 2025 budget for the following year without adjusting it for inflation – aka a budgetary freeze. Augmented costs, not aligning with inflation, amounts to a de facto budget reduction because the purchasing power of beneficiaries decreases compared to the previous year.
2026 Budget: Which tax breaks favor only a select few taxpayers? ## The Zero-Based Budgeting Approach
Mathematician and Macronist deputy Mathieu Lefevre is enthusiastic about the "blank year" idea and pens an essay in La Tribune, predicting 2026 will be a "fiscal blank year." For him, a budget stagnation at current levels of government spending, grants to local authorities, and social benefits (including pensions) would generate up to 25 billion euros in savings.
Let's leave the income tax and social security contribution brackets untouched, Lefevre suggests. These are usually adjusted to match inflation, so scrapping that adjustment would equate to a tax hike. No thanks! On June 5, Energy Transition Minister Eric Lombard reiterated, "There will be no general increase in taxes." But get ready to hear more from the government about their "majorchoices" for the 2026 budget before July 14.
The Executive Eyes All Options
When asked about the "blank year" possibility on June 3, Minister of Labor, Health, and Solidarity, Catherine Vautrin, was quick to emphasize they're nowhere close to announcing anything definitive. But remember, in mid-April, Amelie de Montchalin – deftly handling Public Accounts - signaled she'd consider the "blank year" option, provided inflation remains in check.
"Many tracks are on the table," Astrid Panosyan-Bouvet, from the Ministry of Labor and Employment, asserted on June 5. "After testing and briefing, there can be a unified proclamation by mid-July revealing a comprehensive strategy demonstrating that the effort will be evenly distributed across the nation."
The Fine Print: While the idea of stagnating the budget has some proponents, the flip side is clear: a potential reduction in spending power for beneficiaries, changes in tax bracket adjustments, and lingering questions about the inclusion of pensions, taxes, and other important factors in the "blank year" perimeter.
Buckle Up: * Budget * Public deficit * Zero-Based Budgeting * Francois Bayrou * Public finances * Pension reform
[1] The "blank year" is a fancier term for a budgetary freeze, a situation where expenses remain the same as the previous year despite inflation.
[2] Zero-Based Budgeting is a budgeting approach where all expenses must be justified from the ground up for each new period, rather than incrementally building on previous budgets.
- With the government considering various cost-cutting measures for the 2026 budget, discussions around the "blank year" have surfaced, suggesting a potential freeze of the 2025 budget without adjusting it for inflation.
- Mathematician Mathieu Lefevre, a Macronist deputy, advocates for implementing the "blank year" approach, suggesting that this strategy could generate up to 25 billion euros in savings by maintaining current levels of government spending, local grants, and social benefits, including pensions.
