A recent proposal from the French Senate for the creation of a “sovereign savings account” has been making waves in the country's financial and defense sectors. This innovative idea was devised to bolster the coffers of small and medium enterprises (SMEs) in the French defence industry, through the Military Programming Law (LPM) 2024-30.
Origins of the “Sovereign Savings Account”
The amendment was designed to give French citizens a chance to boost their defence industry directly. By investing their money in a savings account, they would be providing SMEs with much-needed funding.
Response from the Minister of the Armed Forces
Though not in opposition to the proposal, the Minister of the Armed Forces, Sébastien Lecornu, voiced certain reservations. He drew attention to the potential strain on public finances and questioned the viability of the defense industry base (BITD) as a target for investment due to its limited size.
A joint parliamentary committee decided against the “sovereign savings account” idea. However, there was agreement to assign a portion of the funds gathered from the Livret A, a tax-free savings account, to finance the BITD.
Obstacles to the Proposal
The proposal was dismissed by the Constitutional Council, labelled as “off-topic”. This didn't stop three deputies from introducing a similar amendment to the 2024 budget law. They proposed to divert a segment of the savings collected from the Livret A, as well as sustainable and solidarity development accounts, to the BITD.
Tracking the Use of Funds
The amendment served to remind banks of their yearly duty to produce a report, clarifying how funds amassed through these accounts were used.
Integration into the 2024 Budget Law
The government has incorporated the provision into the 2024 budget law. It is slated to take effect from next year, barring any successful no-confidence motions from the opposition that could potentially topple the government.