As international oil prices soared due to the prolonged Middle East war, the French government has finally embarked on large-scale austerity. With public finances being poured into supporting people hurt by the surge in fuel costs, it decided to freeze and cut 4 billion euros from this year's budget to make up for the shortfall. However, the move includes youth and employment budgets, fueling a political backlash.
According to the daily Le Monde, on the 28th (local time) the French Finance Ministry said it would freeze or cut 4 billion euros (about 7 trillion won) from this year's budget. Of that, 847 million euros (about 1.4769 trillion won) will be canceled outright, and 3.2 billion euros (about 5.5799 trillion won) will have execution put on hold for now. Most ministries are affected except for defense and justice.
The French government turned to austerity because of energy prices that have spiked in the wake of the Middle East war. Recently in France, as rising oil prices increased the burden on farmers, fishers, and the transport industry, the government has rolled out a series of fuel cost support measures. It is also pushing to expand energy voucher payments for low-income households.
Prime Minister Sébastien Lecornu said last month that the war would impose a burden of about 6 billion euros on France's public finances, signaling sweeping offset measures. Still, to prevent the deficit from widening, the government set a principle that any new money spent because of the war would be covered by cutting other budgets. The Finance Ministry described it as, "Every euro going out for the war is covered by one euro saved."
The problem is that the austerity cuts are pointing to youth and employment policies. In particular, the support fund for apprenticeship training centers is expected to be slashed to a quarter, from 134 million euros to 33 million euros. The regional government association "Régions de France" pushed back, saying, "The government is once again sacrificing youth policies and vocational education."
Discontent in the parliament is also growing. As the government had not disclosed concrete cut plans, the Senate Finance Committee recently sent a letter to the Finance Ministry pressing it to immediately reveal which ministries' budgets would be cut and by how much. Some lawmakers criticized that the government is effectively overturning the budget passed by the parliament.
The French government's dilemma is likely to grow. The prolonged war is likely to keep pushing up energy support costs. Prime Minister Lecornu also said recently that the scale of war costs needs to be recalculated. Éric Coquerel, chair of the National Assembly Finance Committee from La France Insoumise (LFI), warned that the actual war costs will reach 10 billion euros and that high-intensity additional austerity measures will follow after the Public Finance Alert Committee at the end of June.