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French PM warns businesses of risk of energy rationing this winter

French Prime Minister Elisabeth Borne warned company bosses on Monday about the risk of energy rationing this winter and urged them to take steps to reduce their consumption.

French PM warns businesses of risk of energy rationing this winter
France's Prime Minister Elisabeth Borne delivers a speech to business leaders on Monday. Photo by Eric PIERMONT / AFP

“If we act collectively then we can overcome the risk of shortages, but unless everyone takes part and if all the bad-case scenarios come together then we could be forced to impose reductions on consumers,” she said.

“If we end up with rationing, companies will be the most affected and unfortunately we need to be prepared for it.”

Speaking at the annual gathering of Medef – the business leaders group – Borne asked each business to prepare their own plan to cut energy use, as part of France’s wide ranging sobriété enérgetique (energy sobriety) plan, which will be revealed this shortly.

In addition to the immediate threat of a shortage of Russian gas this winter, the plan – to cut France’s energy use by 10 percent in two years and 30 percent by 2030 – is also a response to the climate crisis.

Borne began her speech by recapping the bleak events of the summer – historically early heatwaves, the worst drought in 60 years, wildfires raging across the country and fatal storms – to underline that the climate crisis is accelerating.

“Every company needs to mobilise and act. I call on everyone to establish their own energy-saving plans in September,” she said, while stressing that the crisis caused by record-high energy prices would help the transition away from fossil fuels.

“The months ahead are just a step in the bigger transition that we need to make,” she said.

France is more sheltered than many European countries from the surge in gas prices caused by Russia’s decision to reduce its exports to Europe after its invasion of Ukraine in February.

France generates some 70 percent of its electricity from a fleet of 56 nuclear reactors, but 32 are currently offline either for routine maintenance or to evaluate corrosion risks.

Ministers will be meeting with business leaders in the weeks to come, and representatives from key sectors to develop industry-wide plans for energy transition.

The first sectors to be reviewed – partially in response to the events of the summer, will be forestry, water and renewable energy. 

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COST OF LIVING

What is considered a good salary in Paris?

The higher-paying jobs are heavily concentrated in the French capital, but set against that is the high cost of living - especially the cost of renting or buying a home. So what is considered a 'high-earner' in Paris?

What is considered a good salary in Paris?

Centrist Renaissance candidate Sylvain Maillard, running for re-election in France’s snap parliamentary elections, was trying to highlight the high cost of living in the capital in a debate on RMC Radio 

“You have extremely expensive rents [in Paris], between €1,500 and €1,700, and then there are all the charges and taxes to pay,” he said.

But what most people seized on was his comment that anyone earning €4,000 a month after tax would not be considered rich in Paris – he predictably was accused of being out of touch with French people’s lives.

There’s no doubt that €4,000 a month is good salary that most people would be happy with – but how much do you need to earn to be considered ‘rich’ in Paris?

National averages

Earlier this year, the independent Observatoire des Inégalités calculated poverty and wealth levels in France.

READ ALSO How much money do you need to be considered rich in France?

According to its calculations, to be considered ‘rich’ in France, a single person with no dependants needs to earn more than €3,860 per month, after taxes and social charges. Around eight percent of single workers have this sum deposited into their bank balance every month, it said.

A total of 23 percent of workers take home €3,000 or more every month, while the top 10 percent clear €4,170. 

To be in the top one percent of earners in France in 2024, one person must bring in at least €10,000 per month. After taxes and social charges.

The median income – the median is the ‘middle value’ of a range of totals – of tax households in mainland France is €1,923 per month after taxes and social charges, according to INSEE 2021 data, which means that a ‘rich’ person earns about twice as much as a person on the median income, according to the Observatoire.

Paris situation

About 75 percent of people living in Paris earn less than €4,458 per month, according to Insee data – so according to those calculations, 25 percent of Parisians earn the equivalent of the top 10 percent in France. 

But that city-wide average still hides a wide degree of variation. In the sixth arrondissement, the median income is €4,358 per month, after tax. In the seventh, it’s €4,255.  Further out, those bringing home €4,600 a month in the 19th and 20th arrondissements are among the top 10 percent in wealth terms.

But still, the median income in Paris is €2,639, significantly higher than the €1,923 France-wide median.

That would mean – using the Observatoire des Inégalités’ starting point for wealth – that a Paris resident, living on their own, would have to bring home €5,278 per month to be considered ‘rich’. 

France is a heavily centralised country, with many of the highest-paying industries concentrated within the capital, meaning there is much more opportunity to secure a high-wage job if you live in Paris.

Cost of living

Even these figures should all be taken with a pinch of salt because of the relatively high cost of living in the capital, compared to elsewhere in France. Paris is objectively an expensive place to call home.

In 2023, France Stratégie published a report on the disposable income of French households, after housing, food and transport costs were deducted. It found that, on average, people living in the Paris region had more left to spend, due to higher incomes and despite the fact that housing costs more.

It’s the income paradox in action. A person with a take-home salary of €4,000 per month has more money to spend if they live and work outside Paris. But they’re much more likely to earn that much if they live and work in Paris, where it’s not as valuable. 

Someone who earns a ‘rich-level’ salary in Paris might not appear rich – because they live in an expensive area, and a surrounded by very wealthy people in property that’s out of reach all-but the fattest of wallets. But they’re still earning more than twice the median income in France.

And that’s what Sylvain Maillard was getting at, clumsily as he may have expressed it.

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