“It won’t be ‘no matter what.’ Invited to respond to rising energy prices at the BFMTV microphone, Bruno Le Maire wanted to clarify the government’s position by using the reverse of the expression used by Emmanuel Macron during the announcement of the first conclusion. “We will all have to make an effort to realize that we are entering a new world,” he added.
The Minister of Economy recalled the cost of measures already taken by the executive branch in October last year. The government then froze gas prices and capped electricity prices. At the same time, those earning less than €2,000 a month received an “inflation allowance” of €100 to limit the impact of price increases on their budget. “The total bill is more than 20 billion euros solely to protect our compatriots from a sharp increase in energy prices,” concluded the resident of Bercy.
Compensating for inflation: between immediacy and inaccuracy
But can the government, faced with a new major crisis, apply the same recipes? “It’s extremely complex,” says economist Mathieu Plan. “They have already taken a lot of measures, but we see that it is very expensive to offset the price increase,” he continues.
If he agrees with the immediate effect of such a measure as an inflationary premium, the deputy director of the analysis and forecasting department of the MFAC points out the problem of targeting this device. “A retired couple who earn 1,950 euros each can get 100 euros per person, while a single mother who commutes, has several dependent children and earns 2,100 euros will get nothing. »
Targeting aside, Matthew Plain emphasizes the short-term nature of these ads. An observation that echoes the words of Bruno Le Mer. “We are not responding to a major geopolitical turn just by paying a check here or there,” the economy minister continued.
Tariff shield is a costly measure
Another possible option is to extend the gas tariff shield over time. This system, in place until June 30, 2022, aimed at freezing natural gas prices in France for individuals, could be extended until the end of the year. Similarly, the executive branch claims to have doubled the beneficiaries of the energy check.
“The government can continue the tariff shield policy, but given its cost, I doubt that it will be able to do this on a general basis,” predicts Jacques Rigodia, an economist and member of the Copernicus Foundation. Because this choice has the disadvantage that it is costly and, above all, the crisis must continue beyond the end of the year. “We are in a shock that will be at least equivalent to the oil shock of 1973,” adds one who was social adviser to Michel Rocard and Lionel Jospin in Matignon. Its effects will stretch over a period of at least ten years.
“But we are not in the worst position,” resents Jacques Rigaudia. This will be far from a Franco-French clash. And even at the European level, this will affect Germany and Italy even more strongly.”
“Absorb the Shock”
Even if they are inaccurate or expensive, the government will have to use some leverage. “The implications for purchasing power will be significant. We will have to soften the shock one way or another,” continues Jacques Rigodia.
The government may then be tempted to opt for concrete and rapid action in preparation for the future. “They won’t be satisfied with re-checking inflation,” says Mathieu Plein. I think they will indeed take action for the humblest households, but in an attempt to target more those households that need it the most, effectively taking a car to work and heating with gas.”
In addition to these one-time checks, Mathieu Plan also recommends significant measures such as investment policies to insulate housing and renew the car fleet. Without going into details, Bruno Le Maire also states the need for a shift: “if there is anything positive that can be highlighted: it is to build our complete energy independence and much less dependence on fossil fuels,” the minister said. economy on Monday.