The Medef unveils its proposals to modernize the French budgetary procedure

In a letter dated April 10, published by Les Echos on Monday and obtained by AFP, the president of the Medef (French Business Confederation), Patrick Martin, details the proposals from French companies to improve the budgetary process in France. He emphasizes that these companies wish to participate in discussions on the governance of public finances, believing they are "directly affected by the consequences of a budgetary governance that is sometimes difficult to understand" and calling for "a more stable, predictable, and comprehensible framework."

In this context of budgetary reform, the Medef points out that France "has chosen not to give constitutional value" to its commitments to reduce the public deficit — including the State, Social Security and local authorities — below 3% of gross domestic product (GDP) in 2029. The employers' organization therefore proposes the establishment of "a constitutional golden rule", which would come into force from 2030 after a "transition" phase.

The Medef believes that "the approach based solely on budgetary acculturation (...) appears insufficient in view of the excesses observed. Even the European framework lacks teeth, as none of the planned sanctions have ever been imposed," pointing to the current limitations of public finance management in France and Europe.

To strengthen fiscal discipline, the organization suggests that "the maximum structural deficit threshold (excluding cyclical factors) could be determined by reference to the balance stabilizing public debt, in order to ensure debt reduction." It specifies that "since the stabilizing deficit is projected at 2,8% in 2026, the structural deficit should, for example, be limited to 1,5% of GDP" in order to reduce the debt by approximately one percentage point, while excluding investments from this rule.

These recommendations come at a time when the current situation remains far from these objectives: the government is forecasting a public deficit of 5% of GDP this year, of which 4,7% is for the structural deficit alone, illustrating the challenges of restoring public finances.

Among other proposals to secure and streamline the budget process, the Medef suggests referring the possibility of adopting the budget by decree to the Constitutional Council, in order to "guarantee legal certainty" in the event of parliamentary deadlock. This mechanism was considered for the 2026 budget, which was ultimately adopted using Article 49-3.

Finally, Patrick Martin concludes by highlighting the upcoming political challenges: "We are fully aware that these proposals raise implementation issues," writes Patrick Martin to Sébastien Lecornu, "but it seemed important to me to submit them to you now (...) ahead of the upcoming election period.", placing these proposals within the national debate on the reform of the budgetary procedure and the control of public finances in France.