After having escaped the caudine forks of the S&P agency, which maintained the French credit rating, the government is now seeking to accelerate the country’s financial recovery. For this, he is organizing a public finance conference on Monday which will highlight the billions of euros in savings necessary to allow France to redress accounts damaged by successive crises.
Organized in Bercy on the initiative of the Minister of Economy Bruno Le Maire and his colleague in charge of Public Accounts Gabriel Attal, in the presence of Prime Minister Elisabeth Borne, these meetings follow the annual reviews of State expenditure, communities and social administrations, launched in early 2023. This will be “an opportunity to present the results of this work (…), the orientations and the avenues that have been adopted by the government to irrigate the next financial texts”, including the draft budget for 2024 presented in September, we say to the cabinet of Bruno Le Maire.
David Lisnard and Carole Delga shun the event
The challenge is in particular to reduce the country’s heavy debt to 108.3% of GDP in 2027 (compared to 111.6% at the end of 2022), which places it on the side of the poor European students, and to bring it below the European objective of 3% the public deficit (4.7% at the end of 2022).
In addition to ministerial speeches, round tables are on the program with an intervention by Pierre Moscovici, first president of the Court of Auditors who regularly calls the executive to order in terms of public finances. The three main associations of local elected officials, disagreeing with the analysis of the situation, decided to shun the event. The presidents of the associations of mayors and regions of France, David Lisnard and Carole Delga, notably denounced in the Sunday newspaper the “game of fools” and “inconsistency” of the executive. Bercy, however, assured that the door to dialogue remained “open”.
To get back on track, the government intends to reduce public spending to 53.5% of GDP in 2027, against 57.5% in 2022. It is counting on the end of the energy shield, the gains from reforms such as pensions or unemployment insurance, or full employment. The executive also froze an additional 1% of appropriations from the 2023 budget and asked the ministries to free up 5% in 2024, in particular to finance the energy transition.
These measures are deemed all the more necessary as the economic environment is getting tougher. Suspended during Covid-19, European budgetary rules will apply again next year and the sharp rise in interest rates is significantly increasing the debt burden, in a context of slowing growth. But between refusal to increase taxes and social tension, with purchasing power at the center of concerns in the face of high inflation, the room for maneuver is narrow, say economists.