About 55 million French people have a " Livret A " savings account. According to the French Deposit and Consignment Office ( CDC ), total deposits amounted to €375 billion in December 2022.
The " Livret A " savings account is a state-regulated savings product, whose operation, interest rate, ceiling and status of holders are determined, and whose interest is exempt from income tax and social security contributions. The interest earned by the savings each year is therefore not considered income and not taxed.
The ceiling for the Livret A is set at €22,950 for individuals and €76,500 for associations ( excluding interest ). The interest accrued during the expired year is added to the capital on 31 December. The addition of this interest may cause the value of the savingsaccount to exceed its limit.
Livret A holders can in principle withdraw their savings at any time at a counter. However, they cannot access a bank card or cheques on this account. No banking transactions can be carried out other than deposit and withdrawal.
Macron wants to build 6 new EPR2-type nuclear reactors, with an option for 8 more. The cost of these is estimated at €52 billion, excluding financing costs, plus an additional €4.6 billion if problems are encountered.
Now, the government wants to use some of the savings from Livret A savings accounts, , in " the public interest ", to finance the construction of these 6 new nuclear reactors.
To encourage the French to accept his plan and set aside even more funds, the interest rate on the Livret A sustainable development accounts has been raised to 3% as from 01 February 2023 and that of the "livret populaire "( which is similar to the Livret A but intended for people with limited means ) to 6.1%.
Smart move. Now that the ECB has raised the base rate to 3% and is raising it again in March by 50 basis points ( to be increased by Euribor ), it is no longer interesting for France to borrow money because of the high interest burden that has to be paid monthly.
It is much more interesting to artificially borrow money from the people by withdrawing their savings on a state product that generates interest anyway and to use this money to finance all kinds of projects.
While Belgian politicians are at loggerheads over the nuclear exit and the closure of nuclear reactors, France is investing in the construction of a series of new nuclear reactors with the help of the population. No French peacock is crowing about the withdrawal of savings for the construction of new nuclear reactors.
Belgium also calls on citizens for self-financing through the formula of government bonds. The big difference between a Livret A and a government bond is that a Livret A holder can withdraw his savings at any time, while this is not possible with a government bond. With this formula, funds are fixed for a minimum period of 2, 5, 7 to 10 years and the holder only receives an interest coupon every year.
What the money from government bonds is used for remains a mystery. Transparency is a dirty word. However, most investors don't lose sleep over this and mainly look at the yield. Now that savings rates are risin, government bonds becomd interesting again.
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