With this measure, the Minister of Economy Bruno Le Maire intends to stimulate the funding of public policies and encourage the French to diversify their investments.
End of the suspense for the Livret A: the rate will fall from February 2020 to its floor level of 0.5%, as foreseen by its new calculation formula. This was announced Wednesday 15th January by Bruno Le Maire who intends to stimulate the funding of public policies and encourage the French to diversify their investments.
It would have been “irresponsible and incoherent” to maintain this rate at 0.75% compared to “our policy of investment diversification” and the “thousands of French people who are waiting for social housing,” the minister explained in an interview. in the daily Le Parisien.
In addition, “this figure takes into account low-interest rates and the level of inflation,” also defends Bruno Le Maire, who followed the recommendations of the Governor of the Banque de France, published shortly before the Minister’s announcement.
Pour la première fois, le taux du livret A va tomber à 0,5%. 55 millions de comptes seront impactés > https://t.co/pgAGObKkx6 pic.twitter.com/osbgK2SyFk
— Le Parisien (@le_Parisien) January 15, 2020
55 million French people hold it
The flagship savings product, the 202-year-old Livret A is now owned by 55 million French people who, in 2018, invested a total of 258 billion euros.
Conceived like a piggy bank supposed to bring backlight but surely, the saver can deposit there or withdraw his money at any time, while seeing his remunerated deposits and his profits not taxed. Its cousin, the Sustainable and Solidarity Development Booklet (LDDS) works in a similar way with a lower deposit ceiling, at 12,000 euros.
Build 17,000 homes
But setting the Livret A rate, which is also used to finance land use planning, has been a headache for several years for the authorities, who have to juggle the sometimes contradictory interests of the financial institutions that manage part of these funds. , savers and institutional borrowers, such as social landlords, SMEs or local authorities.
Bruno Le Maire : la baisse du taux d’intérêt du livret A “c’est 300 millions d’euros de disponibles en plus pour le logement social, 17.000 logement sociaux qui pourront être construits en 2020 (…) c’est une bonne nouvelle” #Europe1 pic.twitter.com/lK1oh8hQJZ
— Europe 1 📻 (@Europe1) January 16, 2020
All in a context of generalized low rates which complicates the task of making money grow.
“This new rate [of 0.5%] will indeed make it possible to build 17,000 additional social housing units and to renovate 52,000 each year” but could also finance “thermal renovation, ecological transition or the renovation of hospitals, schools and nurseries, ”highlights Bruno Le Maire.
“Les Français les plus modestes, ils ont aussi besoin de logement social. Et vous savez aussi bien que moi que le logement social, il est financé par le livret A” répond @BrunoLeMaire #QAG pic.twitter.com/IOA3z1KVU7
— Public Sénat (@publicsenat) January 15, 2020
Floor
Responsible for calculating the rate of remuneration for regulated savings accounts, the Banque de France had previously specified the terms of this new rate-setting formula.
Obtained from the average of short-term monetary interest rates and that of inflation over the last six months, the Livret A rate, according to this method alone, comes to 0.23%. This new formula now includes a floor level of 0.5%.
Bruno Le Maire”Ce chiffre tient compte des taux d’intérêt bas et du niveau de l’inflation. Je tiens à préciser que si nous appliquions la formule de calcul, la rémunération du livret A tomberait à 0,23 %.” https://t.co/vf96MQ31bY
— Le Parisien (@le_Parisien) January 15, 2020
“Therefore, it is the floor of 0.5% which must apply to determine the rate of the Livret A”, had recommended the Governor of the Bank of France, François Villeroy de Galhau, via a press release.
Bruno Le Maire : la baisse du taux d’intérêt du livret A “c’est 300 millions d’euros de disponibles en plus pour le logement social, 17.000 logement sociaux qui pourront être construits en 2020 (…) c’est une bonne nouvelle” #Europe1 pic.twitter.com/lK1oh8hQJZ
— Europe 1 📻 (@Europe1) January 16, 2020
LEP goes from 1% to 1.25%
This remuneration “will never fall below the floor level of 0.5%” just like that of the Sustainable and Solidarity Development Booklet (LDDS), assures Bruno Le Maire. And “in six months, we will see if we need to revise this rate,” added the minister.
Bruno Le Maire annonce simplifier l’ouverture d’un livret d’épargne populaire : “N’importe quel particulier pourra se rendre dans sa banque ouvrir son livret, il n’aura plus besoin d’arriver avec les documents”#Europe1 pic.twitter.com/cbwYtr5MHe
— Europe 1 📻 (@Europe1) January 16, 2020
Another savings product at the regulated rate, the people’s savings account (LEP) also saw its remuneration fall to 1% against 1.25%. Its calculation is different but linked to the Livret A rate: it corresponds either to the Livret A rate increased by 0.5%, or to that of the average inflation observed over the last six months – this is the highest figure who is retained.
“Diversify your savings! “
In support of this decision, inflation forecasts for the year 2020 which “do not allow us today to anticipate significant factors of increase and (of) monetary interest rates (which) themselves should remain sustainable low ”, details the central bank in its press release.
“These two factors combined rule out the prospect of exceptional circumstances,” she said.
By aligning itself with the recommendations of the Banque de France, the government is also pursuing the objective it set itself at the start of its mandate to direct French savings towards businesses.
A refrain repeated by Bruno Le Maire who urges, in the Parisian interview , households to diversify their savings by placing it in products that the government has tried to simplify such as life insurance Eurocroissance, the savings plan actions (PEA) or the retirement savings plan (PER).
