what other countries are doing to support purchasing power

En France, le gouvernement présentera son projet de loi sur le pouvoir d

These are measures eagerly awaited by the French who see, every day more, the effects of inflation on their consumption, their journeys by car, their leisure activities… On July 6, the bill on purchasing power will be presented to the Council of Ministers before being submitted to the various political groups of the National Assembly in the hope of quickly finding a consensus. The bill provides, in particular, for a retroactive increase to July 1 of a series of social benefits as well as the activity bonus or even retirement pensions. As announced on Tuesday by the Minister of Public Service, Stanislas Guérini, the index point will also be revalued by 3.5%. Finally, we can mention pell-mell the extension (and revaluation) of the “transport bonus”, the capping of the increase in the price of rents, the doubling of the “Macron bonus” and the new inflation allowance paid in September directly in the household bank account.

So many expenses which are recorded in the amending finance bill (PLFR), sent by the executive to the high councils of public finance. And if Bercy did not want to communicate the exact costing of the expenses of these measures, the first estimates are around 25 to 30 billion euros. They come on top of those generated by previous purchasing power measures taken earlier in the year, such as the “price shield”, guaranteeing a freeze on gas and electricity prices or even the sending of a inflation check to many households, for a total cost of 26 billion euros.

Like the 100 billion euro recovery plan or even the “whatever the cost” which made it possible to support the economy at the height of the health crisis, France is not skimping on the measures of support granted to its households to help them cope with inflation which reached 5.2% over one year last May. But what about other countries? Do they hesitate, unlike France, to get their hands on the wallet to support the purchasing power of households, even if it means taking the risk of increasing the country’s debt?

Germany: 35 cents discount at the pump

Germany, where inflation reached 7.9% last May, announced in the spring a series of measures intended to protect the purchasing power of its households. For prices at the pump, it also does better than France with a discount of 35 cents on a liter of gasoline, against 15 to 18 cents in France, and 17 cents on a liter of diesel. The German state has also lowered the price of the monthly subscription to public transport from 86 to 9 euros. Another emblematic measure: the exceptional payment of 300 euros to all taxable employees and an additional 100 euros to the poorest households as well as a bonus of 100 euros per child, in addition to family allowances. A boost that amounts to several billion euros without the precise amount having yet been communicated. However, the government has announced that it is planning a budget extension and an increase in new debts planned for the year 2022.

Italy: measures financed by the “surplus profits” of big companies

In Italy, inflation reached record levels, as in the entire euro zone, and led the government to adopt various economic support measures for households and businesses. There is also the rebate on fuel with a reduction of 30 cents in taxes per liter of fuel. At the beginning of May, Rome also announced a bonus of 200 euros for the 28 million Italians with incomes below 35,000 euros. ” These measures represent 14 billion euros, which is added to the 15.5 billion already planned, so we arrive at a total of almost 30 billion euros, or two percentage points of GDP., Prime Minister Mario Draghi said at the time. However, these measures have been taken without resorting to a budget extension”, he had assured. And for good reason, their cost is offset by a tax on the “excess profits” of companies in the energy sector, as explained by the Minister of the Economy Daniele Franco. A 10% tax will have to be levied on profits “additional” before tax made by the companies concerned between October 2021 and March 2022 with regard to the profits made over the same period the previous year.

In Norway, the State in support of electricity expenditure

It is the European country most dependent on electricity for heating. However, its prices have been peaking for several months. Even before the outbreak of the conflict on February 24, the Norwegian state set up an aid program twice in January covering 80% of electricity costs when the market price reaches a certain price per kilowatt hour, specifies Bloomberg. A month earlier, Norway had already announced an aid package worth more than 8 billion crowns (777 million euros)

In the United Kingdom, a plan of 15 billion pounds

15 billion pounds (more than 17 billion euros). This is the amount of the aid plan unveiled on May 26 by the British Minister of Finance, Rishi Sunak, largely intended for low-income households. It follows a first plan dating from February, but which had been deemed largely insufficient. According to a statement from the UK Treasury, “ nearly one in eight of the UK’s most vulnerable households will receive at least £1,200 this year, including a one-off £650 cost of living payment, a £400 Universal Credit hike and a doubling of the reduction on energy bills” for October. Thus, with the measures evaluated at 22 billion pounds already announced, the total aid “the cost of living for low-income households reaches 37 billion pounds this year”notes the Treasury.

As in the case of Italy, this new plan will be financed by a tax temporary 25% cut on energy profits for oil and gas companies, reflecting their extraordinary profits” since the Russian invasion of Ukraine, the statement said.

The United States lowers its taxes

Failing to distribute compensation or other inflation check as in France, the United States practice the reduction of taxes, even their suspension. According to the Tax Foundation, an American think tank, quoted by the New York Times, more than thirty States were, last May, in the process of adopting tax relief. Others have already done so, such as New Mexico, which granted a $1,000 tax reduction to households affected by the rise in fuel prices, or even Iowa, Indiana and Idaho, which reduced the income taxes of their taxpayers.

Nationwide, Joe Biden has called on the US Congress to pass a suspension of fuel taxes during the summer. The federal gasoline tax of 18 cents per gallon (3.8 liters) would therefore be waived for 90 days.