The issue of the state's requisition of French people's savings raises many concerns, particularly in a context where French public debt is reaching historic highs. At the end of the third quarter of 2024, French public debt reached €3,303 billion, or approximately 113% of national GDP. This situation triggered an excessive deficit procedure by the European Union, exacerbating political and economic tensions. Faced with this worrying situation, it is legitimate to ask questions.
The French State does not have the power to arbitrarily requisition citizens' savings
The right to property is firmly protected by the French Constitution, notably by Article 17 of the Declaration of the Rights of Man and of the Citizen of 1789. The Civil and Penal Codes explicitly prohibit any seizure of private property, including savings, without a precise and defined legal framework.
However, there are specific situations where the State can intervene in the savings of the French. The High Council for Financial Stability (HCSF) and the Banque de France have the power to temporarily freeze funds in the event of a major banking crisis. This is a temporary freeze, not a confiscation, limited to a maximum of 6 months for life insurance policies, with a single renewal option.
Another mechanism exists at the European level: the Bank Recovery and Resolution Directive (BRRD). This measure allows struggling banks to involve their shareholders and creditors in the event of bankruptcy. However, this provision only applies to deposits exceeding €100,000, thus protecting the majority of French savers.
Regulated savings accounts such as the Livret A, the Livret de Développement Durable et Solidaire (LDDS), and the Livret d'Épargne Populaire (LEP) still benefit from a full state guarantee. This protection is in addition to the deposit guarantee scheme, which covers up to €100,000 per depositor and per banking institution via the Deposit Guarantee and Resolution Fund (FGDR).
The State actually has other, more conventional and less controversial levers at its disposal.
Taxation remains the main tool for increasing public revenue. The current Minister of the Economy, Eric Lombard, recently announced that tax increases were inevitable.
Reducing public spending is another frequently discussed option. Prime Minister François Bayrou announced that “significant savings will be proposed for the future,” without, however, providing specific details.
The State can also encourage public investment by issuing government bonds such as Treasury bills. This approach allows the French State to ensure its financing while offering citizens an investment opportunity.
Significant recent developments
However, since the beginning of the year, several major events have shaken up the European economic and geopolitical context. In early March, the war in Ukraine escalated significantly following US President Donald Trump's decision to withdraw US military support for Kyiv. Faced with this new strategic situation, European leaders, meeting at an exceptional summit, decided to substantially increase their military spending. An exceptional budget of up to €800 billion was announced to strengthen collective defense against Russian threats. This decision could lead France to significantly increase its own military budget, with significant consequences for its already strained public finances.
Domestic-wise, the censure of Michel Barnier's government in December 2024, following the controversial use of Article 49.3 on the social budget, led to the adoption of a special law extending the budgets initially planned for 2024 to 2025. Furthermore, the new French government presented a budget for 2025 forecasting a public deficit reduced to around 5.4% of GDP. Among the measures envisaged is a temporary exceptional contribution on the profits of large companies with a turnover exceeding one billion euros.
Finally, economic forecasts have been revised slightly downward: expected growth for 2025 is now estimated at 0.9%, compared to an initial forecast of 1.1%. The annual cost of servicing the French debt is expected to reach around 54.9 billion euros this year. In this tense context, a controversial proposal to direct part of the funds in the Livret A savings account towards financing French companies in the strategic defense sector is still under parliamentary review and is sparking much debate.
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