Blood, toil, tears and sweat. That’s what Winston Churchill promised the English in May 1940, just after he was appointed Prime Minister, in the middle of the World War. Michel Barnier seems set to make the same kind of statement to the French. At least when it comes to public money.
Two weeks before the presentation of the State budget for 2025, its two ministers, who now share Bercy, prepared the ground on Wednesday, September 25, during a hearing by the Finance Committee of the National Assembly.
Faced with the violent slippage of public accounts, “We will propose to you a budget of truth and effort, which will require significant corrective measures,” announced Antoine Armand, now responsible for the economy. “Yes, the situation of our public finances is serious,” added, martially, his colleague Laurent Saint-Martin, responsible for the budget. To act, “the time is now.”
Without being precise, both have set a line: the efforts will bear fruit “first and foremost” on public spending, which they are preparing to cut by “strong measures”. Tax increases, however, will remain limited. Clearly, the two Macronist ministers do not intend to call into question the supply-side policy, favorable to businesses, defended by the President of the Republic, Emmanuel Macron, for seven years, despite the surge in public debt that accompanied it.
Sweat and tears, but first, ” truth “This is how Laurent Saint-Martin began his presentation. “The truth is that in 2024, the public deficit risks exceeding 6% of GDP [produit intérieur brut] according to the latest estimates available to us”, said the new minister responsible for the budget.
France will have to get into even more debt
Overwhelmed silence in the small room of the Palais-Bourbon. After having slipped to 5.5% of GDP in 2023, this deficit of the State, local authorities and Social Security was initially to be reduced to 4.4% in 2024, to return, in 2027, to the 3% provided for in the European treaties. However, instead of decreasing, the deficit continues to worsen. Between the April forecasts and those revealed on Wednesday, the gap reaches more than 25 billion euros.
The causes of the slide remain to be unravelled. Before leaving Bercy, Bruno Le Maire had placed a large part of the responsibility on the backs of local authorities, accused of spending without counting. “There was a time when every mayor wanted his own gymnasium or party hall, but that’s over, replies the (socialist) senator of Sarthe Thierry Cozic. Local elected officials are not bad managers.
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