Congress in session on Tuesday 26 November 2024. Photo: LNC
An emergency 231-million-Euro French package for New Caledonia has been reduced by one third because of the French Pacific territory's current political crisis.
The initial French aid package was endorsed early December 2024, in an eleventh-hour vote at the French National Assembly, minutes before French Prime Minister Michel Barnier and his government fell to a motion of no confidence.
The "end of management 2024" bill amounted to 231 million Euros, specifically to allow New Caledonia's essential public services to keep operating in the next few weeks.
But the financial package was pre-conditioned to New Caledonia's Congress endorsing those reforms before the end of the year.
Out of the three tranches of the total aid, the Congress managed, during its December 23 2024 sitting, to endorse two.
Then, on Christmas Eve, New Caledonia's government fell, due to a resignation from one of its members, Calédonie Ensemble.
Domino effect
Louis Mapou Photo: NC la Première
Since the government led by Louis Mapou was toppled on Christmas Eve, pro-independence MPs at the Congress refused to take part in further votes.
They did not turn up on Boxing Day sitting on Thursday 26 December.
This made it impossible for the Congress to endorse the third and last tranche of the reforms which were a precondition to the last third of the French aid package.
Letter from Bayrou and Valls
Minister for Overseas Manuel Valls Photo: SUPPLIED/Pool picture
In a letter received by New Caledonia's MPs at the weekend, both new French Prime Minister François Bayrou and his new Minister for Overseas Manuel Valls explained the failure for New Caledonia's Congress to endorse the last third of the demanded reform package means the whole package of 231 million Euros will not be paid in full, and that one third of the total will have to wait until next year.
The confirmed amount, for the time being, is now 154 million Euros which will go towards New Caledonia's Provinces and municipalities (125 million Euros).
The remaining 29 million Euros will be paid and used for the payment of New Caledonia's unemployment benefits and to allow the French Pacific territory's power company, ENERCAL, which is on the brink of collapse without immediate assistance.
77 million Euros withheld
"The last third of the initial 231-million-Euros package of for New Caledonia (77 million Euros) will be released in 2025, once the pre-condition as stipulated in the initial agreement, regarding a reform of the TGC (General Consumption Tax, a local equivalent of a VAT) is adopted by (New Caledonia's) Congress. Failing that, it will not, Bayrou and Valls explained in the same letter.
They further wrote that those reforms were "indispensable" to ensure "visibility and stability" for New Caledonia's "economic stakeholders and more generally to all of New Caledonians at a time when a dialogue is supposed to take place on its institutional future."
The block resignation from Calédonie Ensemble entails that the whole government of New Caledonia is deemed to have resigned and acts in a caretaker mode until the inception of a new government.
New Caledonia's Congress has been convened for a special sitting on 7 January 2025 to elect a new government team, under the principle of proportional representation and a spirit of "collegiality".
One particular point of contention was Mapou's efforts to secure a loan of up to €1 billion from France, under a 'PS2R' (reconstruction, refoundation and salvage) plan to rebuild New Caledonia after the riots' damage (estimated at some €2.2 billion) and the subsequent thousands of job losses.
