Every year, it’s the same refrain. Bercy representatives assure that they will reverse the debt curve and reduce our public deficit. Promises that no one believes, because they have never been kept. As one expert confides, “why try to restore our public finances when no one cares?”
Nobody cares ? Politicians, probably: what advantages would they derive from a strict cure administered to the country? The French, no doubt: their addiction to public checks quickly made them forget the question of who pays.
However, we observe growing concern among certain economists or even among the government, proportional to the rise in interest rates. France, eaten away by public spending and weighed down by an abysmal debt (3,050 billion euros, or 111% of GDP) must go on a diet. We are far from the mark: in 2023, its deficit to be financed was revised upwards, from 165 to 172 billion euros, and in 2024, it will have to borrow 285 billion euros to maintain its lifestyle, a absolute record.
So what ? So we changed worlds. The sudden rise in interest rates constitutes an unprecedented danger for France. We live more and more on credit, and this credit costs more and more: 48 billion euros in 2024, 74 billion in 2027, the first item of expenditure ahead of National Education or Defense. We understand better why the boss of Bercy chanted “spend less, spend better” last year. This is good news, especially when we know that the French deficit will reach 5% of GDP in 2023, according to Brussels, or almost two points above the euro zone average.
To return to the objective of 2.7% in 2027 set by Paris, we will have to stand firm. Hence Elisabeth Borne’s calls for savings: the Prime Minister wants to recover 12 billion by 2025. But how can we achieve this when, according to Brussels, France’s growth rate will be only 1.2% in 2024 and the unemployment rate rises? The very Keynesian Olivier Blanchard, formerly of the IMF, launched an alert to all countries on the risk of an explosion of debt. While warning: “A drastic and immediate consolidation would very likely be catastrophic, both economically by triggering a recession, and politically by increasing the share of votes going to populist parties” (1). Making efforts, without it being too obvious: an impossible equation for the government. Except for making businesses pay: among the options envisaged is a reduction in aid aimed at them. An easy but dangerous calculation because it would risk calling into question the Macronian credo of France’s attractiveness…
In the meantime, the debt is growing: in the time of reading this editorial, it has increased by 1.39 million euros (2). Or 7,341 euros per second…
(2) According to the rate of increase in net public debt since the start of the year (source Insee).