It is the story of a country in the European Union, which was doing rather poorly economically at the start of the decade. Like its neighbors, this state, seven times smaller than France and seven times less populated, has not escaped the Covid pandemic, with a death toll approaching 25,000. Its economy was heavily affected: in 2020, public debt was close to 135% of GDP, GDP fell by more than 8 points, and its public deficit was around 6% of GDP.
A black picture for Portugal, since it is about it, not to mention the high inflation that occurred in 2022, in the wake of the war in Ukraine, which did not help to fix things. And yet. In 2024, Portugal will perform remarkably well. “In terms of fiscal policy, public debt was reduced to 99% in 2023 according to the Bank of Portugal, surpassing the expectations of the government which projected a weight of public debt at 103% of GDP for 2023 in its Budget for 2023. Portugal is also expected to record its second and largest budget surplus since the start of democracy, around 1% of GDP in 2023. In 2023 and 2024, the main rating agencies have increased their rating of sovereign debt which is now at level A.”
These lines are extracted of a note, published in March, by the French Treasury services. The same services which add: “the record drop in public debt in 2023 places Portugal at the top of the euro zone countries which have reduced their debt level the most.”
Even Greece or Spain did better than Paris
Had Bruno Le Maire taken note of the Portuguese case, before engaging in convoluted explanations on the downgrading of France’s sovereign rating by S&P on May 31? Certainly, this sanction from the American agency was expected. Was it necessary to proclaim loudly and clearly that “in the face of Covid, we saved the French economy”? How is it then that Portugal has managed to stem the Covid and inflation crises, while managing to get out of debt, and maintain growth higher than that of France? That Ireland has managed to reduce its public debt from 58 to 44% of GDP since 2020? Even Greece and Spain have done better than Paris in terms of public debt reduction…
It is also difficult to believe that the deterioration of the French rating will have no impact on our daily lives. Certainly, the sanction suffered by France remains very symbolic, but above all it reflects the spiraling public debt, with the corollary a bill for interest charges which is soaring: 55 billion in 2024, compared to 34 in 2020. Expenditures of Covid, anti-inflation shield, watering of bonuses in the run-up to elections and the Olympic Games : the multiple versions of “whatever it takes” have completely destroyed our finances. Confident, Bruno Le Maire nevertheless ensures that he is working towards their recovery in 2027 and “believes in the return” below the 3% deficit. “To govern is to make people believe,” said Machiavelli.
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