Outrageous Predictions
Executive Summary: Outrageous Predictions 2026
Saxo Group
Read Saxo's Outrageous Predictions for 2026, our latest batch of low probability, but high impact ev...
Access both platforms from your single Saxo account.
Macron’s necessary reform to support the industrial sector
Christopher Dembik
Head of Macroeconomic Research
Summary: A key measure, part of the EUR100bn stimulus package unveiled last week by the new French government, has attracted a lot of attention in business circles. The government has proposed to cut taxes on production by EUR10bn each year until at least 2022. This measure should be enforced next year, but uncertainty remains whether it will be extended beyond 2022 (after the presidential election). Taxes on production have been regularly criticized by employers' organizations for penalizing productivity and competitiveness. "It is a major announcement for the French economy. For decades, the industrial sector has been waiting for such a measure", commented on Twitter the former head of the main employers' organization in France, Laurence Parisot.
Taxes on production are higher in France than almost anywhere else in Europe: Taxes on production in France form a very heterogeneous set of compulsory levies that are mostly paid by companies but not only since property tax, which is paid by homeowners, is also labeled under this name in national accounting. Taxes on production refer to more than a dozen levies with low unit revenue yield. Actually, 13 different types of taxes make up around 80% of total tax revenue. The most important taxes are the contribution sociale de solidarité des sociétés (C3S, corporate social solidarity contribution) on turnover, the cotisation foncière des entreprises (CFE, business property contribution) and the cotisation sur la valeur ajoutée des entreprises (CVAE, contribution on business value added) on business value added. The C3S is particularly criticized by companies because the tax is applied at each stage of production, thus limiting incentives to localize the whole value chain in France and affecting productivity negatively. Based on Eurostat data, taxes on production are higher in France than almost anywhere else in Europe, with the exception of Sweden where, contrary to most other European countries, social protection is mostly financed by taxes and not by social contributions. In France, taxes on production are equal to 4.9% of GDP versus 2.2% in the Eurozone and only 0.7% in Germany.
A welcome measure to reduce the competitiveness gap between France and Germany: The decision to cut taxes on production by €10bn each year until at least 2022 is a significant and timely move to reinforce business competitiveness and close the gap with Germany. This is a new addition to the comprehensive set of pro-growth reforms implemented by Macron to unlock the French potential. On top of it, this is a larger tax cut than that asked by employers (€5bn per year). When implemented, this welcome decision should reduce the gap by one-third between France and Germany when it comes to taxes on production. At this stage, it is still unclear which tax the government is set to scrap or reduce due to ongoing negotiations, but it would certainly be a decisive progress for companies if it would be the C3S (corporate social solidarity contribution).
Long term uncertainty remains : In the long run, uncertainty remains whether the tax cut will be extended beyond 2022 and the presidential election. The government has not indicated yet whether it is a permanent tax cut or whether it is a temporary measure to help businesses restarting production and dealing with the economic shock related to the COVID-19. It is likely that no final decision has been made at this stage. There is no hurry to act since the recovery plan, which includes tax cut proposal on production, is expected to be passed in September after the parliamentary recess.
Latest Market Insights
Outrageous Predictions 2026
-
-
Outrageous Predictions
A Fortune 500 company names an AI model as CEO
Charu Chanana
Chief Investment Strategist
Can AI be trusted to take over in the boardroom? With the right algorithms and balanced human oversi... -
Outrageous Predictions
Dollar dominance challenged by Beijing’s golden yuan
Charu Chanana
Chief Investment Strategist
Beijing does an end-run around the US dollar, setting up a framework for settling trade in a neutral... -
Outrageous Predictions
Obesity drugs for everyone – even for pets
Jacob Falkencrone
Global Head of Investment Strategy
The availability of GLP-1 drugs in pill form makes them ubiquitous, shrinking waistlines, even for p... -
Outrageous Predictions
Dumb AI triggers trillion-dollar clean-up
Jacob Falkencrone
Global Head of Investment Strategy
Agentic AI systems are deployed across all sectors, and after a solid start, mistakes trigger a tril... -
Outrageous Predictions
Quantum leap Q-Day arrives early, crashing crypto and destabilizing world finance
Neil Wilson
Investor Content Strategist
A quantum computer cracks today’s digital security, bringing enough chaos with it that Bitcoin crash... -
Outrageous Predictions
Taylor Swift-Kelce wedding spikes global growth
John J. Hardy
Global Head of Macro Strategy
Next year’s most anticipated wedding inspires Gen Z to drop the doomscrolling and dial up the real w... -
Outrageous Predictions
SpaceX announces an IPO, supercharging extraterrestrial markets
John J. Hardy
Global Head of Macro Strategy
Financial markets go into orbit, to the moon and beyond as SpaceX expands rocket launches by orders-... -
Outrageous Predictions
Britain’s Great EU Backdoor Return
Neil Wilson
Investor Content Strategist
Faced with rolling fiscal, economic, trade and political crises the UK government sneaks back into t... -
Outrageous Predictions
Despite concerns, U.S. 2026 mid-term elections proceed smoothly
John J. Hardy
Global Head of Macro Strategy
In spite of outstanding threats to the American democratic process, the US midterms come and go cord...