After falling by 7.5% in 2020, France’s GDP increased by 6.4% in 2021, by 2.5% in 2022 and by 0.9% in 2023. In 2024, it is expected to grow at little almost the same rate as last year. This performance is not catastrophic but it is not glorious either, especially if we take into account that the population is increasing, which means that GDP per capita, which measures individual enrichment, is almost stagnant. . Under these conditions, it is impossible to sustainably increase salaries or inject money into our public services. Without growth, we no longer finance anything, the population is condemned to frustration and the political debate to resentment.
France has never left “whatever it takes”
But there is more worrying. This weak growth was largely supported by our public deficits, that is to say by the increase in our debt. In 2023, the State deficit – excluding social security and local authorities – exceeded 170 billion euros, barely 5 billion less than in 2020, the year of Covid. Alone, aid to businesses and households to cope with rising energy costs absorbed 85 billion euros. These astronomical figures show two things. On the one hand, the level of protection of the private sector by the public sector is, in France, exceptionally high. We must always remember this. On the other hand, our country has never left “whatever it takes”. If things had been otherwise, the state deficit would have fallen significantly. However, the financial exception of 2020 remained the rule in the following years.
Bruno Le Maire was obviously right to signal the end of recess by announcing 10 billion euros in savings for the State. If we want to be collectively responsible, these 10 billion are just the beginning. The State spent 455 billion euros in 2023. Nearly 40% of this expenditure is financed on credit. Bruno Le Maire’s announcements put a stop to these slippages but are still very far from the effort that will need to be made in the coming years and which will, ideally, involve a restructuring of the public sphere and a significant reduction in number of civil servants outside of sovereign functions.
When it comes to simplification, caution is a trap
That being said, the end of “whatever it takes” poses a formidable macroeconomic challenge. If the public deficit has supported growth in recent years, the financial tightening should, conversely, weigh on activity. “France Relance” and other “energy shields” are a thing of the past. To revive growth, public authorities will have to invent something other than traditional Keynesian stimulus. This is where vocabulary matters. Because we are going to have to replace the “relaunch” of growth with its “liberation”. We can no longer give money to businesses? Let’s offer them simplification, by removing as many standards as possible.
University macroeconomists, who unfortunately too often have the ear of the President of the Republic, will explain that, in their model, administrative simplification generates little additional activity. It is true that, when we increase the public deficit by 100 euros, these 100 euros are automatically found in the economy. Keynesian recovery is expensive, but it is immediately effective. On the other hand, when we remove a regulation, we reduce – a little – the production cost of a company and we widen – a little – the regulatory gaps in which innovation and productivity can be accommodated. It’s effective, but the macroeconomic reward doesn’t come right away. The public deficit quickly revives demand. Normative simplification is slowly boosting supply. Thus, to have effects, the latter must be massive and uncomplicated.
The trap of simplification is not doing enough. Each standard less means additional freedom and therefore economic activity. Therefore, here is my advice to the government: let loose and remove everything that can be removed, it’s free! When it comes to simplification, caution only guarantees one thing: the absence of visible results.
Nicolas Bouzou, economist and essayist, is director of the consulting firm Astères
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