The 2025 budget is turning into a nightmare for two reasons. The first is calendar-related. In theory, it should be presented to the public in a month. Of course, Matignon and Bercy are working on it, but we wonder how the interactions between the outgoing cabinets, the administration and the new government will take place.
The second difficulty is financial. Given the slippage of the State accounts in 2024 and, probably, of those of Social Security, bringing the total deficit to a low of close to 4% of GDP next year seems impossible. We will be closer to 5% even though the spread [NDLR : l’écart] The ten-year rate with Germany is around 70 basis points – compared to 50 points in normal times – and the spread with Portugal has become positive. In other words, the markets still have some confidence in France but are clearly placing it under surveillance.
Let us admit, however, that the government succeeds in building and passing a serious and credible 2025 budget. The respite would in reality be short-lived, because the damage is deep. Budgetary rigor through spending cuts or so-called “exceptional” levies, without changing the functioning of the public sphere, is not enough to reduce deficits and debt in the long term. One of the main challenges for our country is therefore to make its public sector more productive, that is to say to ensure that the quantity and quality of its services, and therefore its contribution to the economy, increase faster than its cost.
A balanced budget target
New Zealand, the United Kingdom, Portugal have all successfully met a similar challenge over the past thirty years. A lesser-known example is Quebec, which does not entirely identify with Canada. This vast country is highly decentralized, and Quebec has a large degree of financial autonomy. Its budget law requires it to aim for a structural budget balance – the current target for returning to balance is the end of this decade.
Certainly, since the 1990s, the federal government has itself made significant efforts to improve the productivity of its public services. Public policies are subject to precise objectives, the responsibilities of agents are defined and results measured, taxpayer satisfaction is quantified, civil servants are autonomous and evaluated. So many reflexes that are lacking in France. Our public sphere is developed, our government is the most protective in the world, compulsory deductions are particularly heavy. The counterpart should be that each euro spent is subject to tracking and monitoring.
A fund dedicated to debt repayment
But Quebec goes even further than Canada, with two mechanisms that France could draw inspiration from. The first of these innovations is the “generations fund”, created in 2006. It is allocated to repaying the debt. Fueled by energy taxes, by a portion of budget surpluses when there are any and by the return on its own investments, it gives Quebec and its creditors the assurance that there is a protected mechanism that repays the debt and lightens the future financial burden.
French Social Security has certainly had a tool since 1996, the Social Debt Amortization Fund, which pursues the same objective. But it is funded by social security contributions and by borrowing, and its lifespan was supposed to be limited (admittedly, it is constantly extended). Conversely, the generation fund is sustainable and ensures its development largely through the profitability of its investments. The creation of such a fund in France would make it possible to constrain our budgetary policy with the concern of repaying the debt, and to reassure our creditors.
The second Quebec system is the “auditor general of public finances”, with an emphasis on education and transparency, whereas the reports of the Court of Auditors are long and proceed from an accounting and legal logic. The French “auditor” would be responsible, at the request of Parliament and citizens, for auditing public accounts and policies that commit public money, at any time. This innovation would improve the effectiveness of our public policies, their transparency and accountability. These Quebec-style systems could even achieve consensus.
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