Employers' organizations concerned after Prime Minister's announcements

The Medef, the leading representative employers' organization - which includes large groups as well as many SMEs among its members - said it was "very concerned, beyond the cost of government instability, by a deteriorating French and international economic climate."

"However, this situation is not taken into account in the Prime Minister's announcements," according to the Medef, whose "concern that the country is not giving itself the means for lasting stability and success is growing."

The measures announced - including the suspension of pension reform until the 2027 presidential election and the extension of an exceptional corporate tax surcharge - "perhaps respond to a political emergency but do not live up to this ambition," the organization continued in a press release, by "once again increasing already record compulsory levies."

The Medef warns of the "risk of the country's downgrading", calls for "not sacrificing the future in the short term", and announces, without specifying, that it "will assume its responsibilities, on behalf of the 240.000 companies it represents, employing 12 million people".

Afep "takes note"

The draft finance bill and the draft social security financing bill, presented to the Council of Ministers on Tuesday, propose, on the one hand, a "tax fairness package" aimed directly at large companies for 4 billion euros, via an extension of the corporate tax surcharge, and the wealthiest taxpayers, via a global tax of 2,5 billion euros on financial assets contained in family holding companies, and incomes exceeding 250.000 euros annually or 500.000 euros for a couple.

Mr. Lecornu also conceded a suspension of the pension reform, a sine qua non condition set by the Socialist Party to avoid censuring the government.

The employers' lobby Afep, which represents the 117 largest French companies, curtly "took note" of the budgetary announcements on Tuesday, observing that in addition to "the new increase in corporate taxation of around six billion euros," the guidelines presented "call into question the improvement in public finances as well as the support for the dynamics of employment of seniors made possible by the pension reform adopted in 2023."

These announcements "are in opposition to the priorities of large companies. They will hinder their ability to invest, to produce in France and internationally, to support employment and thus to contribute to collective prosperity," deplores Afep.

"You dare!"

The U2P, which represents small, local businesses, which are not affected by tax fairness measures, was less severe, because "nothing would be worse than prolonging the current instability when businesses and all economic players need direction, decisions and visibility."

She nevertheless considers that "the suspension of the pension reform is not good news for the country because it will aggravate the drift in social accounts" and that this decision "must remain temporary".

The organization will take "its full part in the work that will be submitted to the social partners", "welcoming" the return "of the value of work at the heart of our social pact".

The U2P will, however, be "particularly vigilant" to ensure that budgetary laws "do not unbalance local businesses, and will oppose any further questioning of support for businesses that train apprentices."

Overall, its president, Michel Picon, was rather positive: "I want to say: dare! Let's go in search of these compromises that we lack so much and that prevent our companies from investing, hiring, and developing. We have a collective obligation to achieve results," he said in the U2P press release.