Questioned by the Horizons deputy for Corsica-du-Sud Laurent Marcangeli this Tuesday, May 19 at the National Assembly, Prime Minister Sébastien Lecornu declared that he was considering budgetary savings beyond the six billion euros initially planned, in the face of the crisis caused by the war in the Middle East.
We’re going to have to tighten our belts a little more. This Tuesday, May 19 at the National Assembly, Prime Minister Sébastien Lecornu affirmed that he is considering additional savings to the six billion euros of credit freezes already planned to compensate for the “impact” of the war in the Middle East.
“Unfortunately, this geopolitics has settled into the reservoir of the French and unfortunately, we see it, in one form or another, it will last,” he admitted after being questioned by the Horizons deputy for Corsica-du-Sud Laurent Marcangeli.
“Hybrid wars or unfortunately more direct wars will multiply and obviously, we pay cash for our dependencies in this area,” he added.
And inevitably, “the activity of our armed forces in external operations throughout the area, inevitably, creates expenses, impacts on public finances which were obviously not anticipated when we voted on the budget”, underlined the tenant of Matignon.
Gels de crédits
In mid-April, the government had already announced that six billion euros in savings on spending could be made in 2026, in order to offset the cost of the war. This should take the form of credit freezes or targeted cancellations.
“But once again, it’s a war and I think that the six billion euros that we have documented will have to be updated, obviously, in the times to come.”
“It goes without saying that we will come back to this in transparency,” he added, without disclosing more details on the nature of the additional budget cuts which are under study.
Aid soon for the chemical sector?
However, “in every crisis, it’s always the same people who pay,” acknowledged the Prime Minister, who nevertheless recalled that the challenges posed by the conflict in the Middle East are different from those which presented themselves at the start of the war in Ukraine four years ago.
“The war in Ukraine presented a crisis of volume, of access to energy, of access to gas, where this crisis of maritime transport (…) means that we have a crisis of imported inflation on energy”, he explained.
Faced with soaring energy prices, the government has repeatedly provided targeted aid to the economic sectors most exposed to the crisis, such as fishing or construction.
“From the start, my obsession has been that whole sections of the country’s economic activity do not come to a standstill (…) Our fishermen friends do a cost/benefit calculation: either there is a profitability in going out, the boats go to sea, or there is no profitability in going out, the boats remain at the quay”, continued Sébastien Lecornu.
If certain economic sectors are driving growth upwards, such as defense, communication or even energy, the Prime Minister cited two sectors in “tangent”: agriculture and housing.
“Why tangents? Because the capacity to produce is there. Because unfortunately, the cost of inputs and not just GNR, but fertilizers, and all materials derived from oil, plastic to obviously name just one obviously creates inflation which can be contagious,” he explained.
Sébastien Lecornu also cited another sector “about which we don’t talk much”, namely chemistry. “It is very strongly exposed at the moment,” he said, which is why the head of government asked the Ministers of the Economy Roland Lescure and of Industry Sébastien Martin to “quickly make proposals”.
