Electricity pricing sparks debate: Antoine Armand prepares to show goodwill
In a candid conversation on BFMTV on November 28, Antoine Armand, France's Minister of Economy, hinted at potential compromises - notably on the controversial electricity tax - to steer clear of a political and fiscal turbulence.
Bloomberg / Contributor By Valentin Dechambre Published on
Antoine Armand fears dire consequences if the government imposes draconian measures. During his BFMTV interview, the Minister of Economy voiced concerns about the potential for the French economy to derail without a sound budget. "There's been some evolutions on this budget, with small pension adjustments, reductions in contributions, and the Prime Minister has hinted at a potential electricity reduction. This conversation is worth having," he reminded his audience, expressing readiness for compromises.
While the escalation of the domestic consumption tax on electricity is his official red line, Armand made it clear that the government is open to a "gesture" on electricity prices.
"But this gesture shouldn't be made recklessly, it should align with the budget we're working on. If we surpass all our budgetary targets, this achieves nothing by saying we've straightened our accounts," he added. The Minister of Bercy affirmed that "discussions" are ongoing on this topic. "This gesture is what we'll have to seriously consider, discuss, and on which a proposal will need to be made, as the Prime Minister indicated," he concluded.
Is stability at last within reach for French households with renewable energy? ## Senate Scraps Electricity Tax Increase
The rejection of the budget could potentially send France into the "abscess", "downfall", "disintegration of the nation", as Armand dramatically predicted. The Senate, led by the right, voted overnight on November 26-27 to approve an amendment by the budget's general rapporteur, Jean-François Husson, calling for the cancellation of the proposed electricity tax hike. A reminder: the government planned to push the domestic consumption tax on electricity (TICFE) beyond its pre-crisis energy threshold, to 32 euros per megawatt-hour.
The French government has been proactive in revising energy tax policies, as shown by the ongoing consultation on axing the reduced 5.5% VAT rate for electricity and gas delivery subscriptions, in favor of the standard 20% VAT rate[2]. This change suggests an effort to fine-tune energy tax policies, but stops short of specifying whether this will alleviate the electricity tax.
For precise information on any compromises, it's essential to consult official government announcements or press releases related to Armand's statements. Economic forecasting shows a decline in energy prices and inflation, which may impact tax policy decisions[5].
Antoine Armand, France's Minister of Economy, expressed his concern about the potential impact of draconian measures on the French economy and central issue of finance, stating that the government might consider a "gesture" on electricity prices to prevent a political and fiscal turbulence. The Senate's rejection of the proposed electricity tax increase could signal a compromise on this contentious issue, but specific details about any financial adjustments will likely be forthcoming from official government announcements or press releases.
