While the commitment of the United States is called into question and the Russian threat seems more present than ever, the European Union presented on 4 March last the European plan «ReArm» to allocate 800 billion euros for defense. The general idea is that each country increases its spending in this sector. But what about France?

In France, specifically, the government intends to use 3 levers such as public financing, private financing and popular financing.

But then should we worry about our liquidity?

In concrete terms, the time is for incitement and not for the obligation or the requisition of the savings of the French. Here is the statement of Eric Lombard, Minister of Economy and Finance. “I want to reassure the French: they will do what they want with their savings. We want to convince the French who want to, and have savings, to invest in our defense economy.”

To go in this direction, a new fund will be created by Bpifrance. This fund of 450 million euros will be open to all French citizens and can be subscribed via life insurance products or directly from Bpifrance. It will be available for 500 euros. But we will see that it is difficult to make more repellent! Indeed, in view of the first information available to us, the investment would be blocked for a minimum period of 5 years, with unsecured capital, and no tax advantage per se for the fund. No details have yet been provided about the use of funds. Finally, the return itself will depend on the performance of the companies in which the fund invests, so there is no certainty for now.

Even if the time is right for incentives, what are the rights of the state on private investors' savings?

The tax administration already has legal mechanisms to intervene on taxpayers' assets in case of unpaid debts. The Notice to Third Party Holder (ATD) and the Administrative Seizure to Third Party Holder (SATD), which allow the collection of amounts due directly from the accounts, books or contracts of private investors. However, these mechanisms are strictly regulated and can only be applied in the event of unpaid payments. These levies cannot therefore be used for national purposes. There is also the "bail-in" mechanism that could be implemented, only as a last resort and for amounts exceeding €100,000. In the event of a major crisis, there could be a temporary hold on funds, notably to prevent the collapse of the banking system. In this conjecture, the Sapin 2 law would allow to temporarily suspend purchases of life insurance contracts.

Fortunately, there are envelopes to circumvent this law, especially as the Luxembourg life insurance contract is out of scope, allowing the private investor to secure his funds. (Find more details on our article dedicated to this investment envelope. https://www.wealth-a7.com/en/actualites/avec-un-contexte-economique-incertain-decouvrez-pourquoi-le-contrat-d-assurance-vie-luxembourgeois-constitue-e-alternative-incontournable-/)

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