Pecause it has limited the rise in energy prices and therefore inflation, the “tariff shield” is the pride of the Minister of the Economy, Bruno Le Maire.
It must be said that its effects are spectacular: admittedly rising sharply, inflation in France today remains significantly lower than in our neighbours. Measured over one year and on a harmonized basis, in August it was 6.6% in France against 9.1% in the euro zone as a whole, barely less in Germany and up to 25.2 % in Estonia.
This difference is not entirely due to government policy (energy, and in particular gas, weighs more heavily in the price index in Estonia), but it largely contributes to it. INSEE has calculated that without the tariff shield inflation would have been 3.1 points higher.
The primary objective of the shield is social: it is to protect the purchasing power of low-income households. But it is also economical, and Bercy makes no secret of its desire to make lasting gains in competitiveness. The opportunity is great: take advantage of the shock to devalue the real exchange rate vis-à-vis our partners.
Just ten years ago, the Welsh report called on the government to lower social security contributions to gain in competitiveness. We remember the following: CICE [crédit d’impôt pour la compétitivité et l’emploi] and pact of responsibility soon signed François Hollande’s conversion to the supply-side economy. They thus operated a massive transfer towards the companies, whose political consequences were going to be terrible for the left.
rake wide
With the tariff shield, the government has chosen not to target low-income households. If he had opted for targeted transfers, he would have paid significantly less, but twice: to the cost of direct support measures would have been added the increase in social minima, the value of which is indexed to prices, and that of relief contribution, the field of which is indexed on the minimum wage. But above all, he would have allowed an inflationary spiral to develop. Hence the choice to cast a wide net, even if the direct cost of the measure (at least 48 billion euros gross for 2023, nearly 20 billion net) is high.
The alternative could have been dual pricing, which gives all households access to the same amount of energy at a subsidized price. It is towards this formula that Germany is moving. Like the shield, a dual tariff has the advantage of being able to be taken into account in the calculation of the price index and therefore does not feed the price-wage spiral.
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