France spends more than it earns, much more, and Emmanuel Macron – described as a neoliberal president by his rivals and himself convinced that his country’s credibility depends on balanced public accounts – is unable to control them. There was a hole of 154 billion euros in 2023, a deficit of 5.5% of the gross domestic product, as published this Tuesday by INSEE, the French statistical institute.
The figure, 0.6% more than expected, casts doubt on the French Government’s ability to meet the objective of reducing the deficit below 3% within three years, the limit set by European standards. The debt stands at 110.6% of GDP. The response from Macron and his Finance Minister, Bruno Le Maire, has so far consisted of applying cuts worth 10 billion euros.
When it comes to reducing the deficit and debt, “the national interest is at stake to face necessary investments or any new crisis that requires mobilizing public funds,” writes Le Maire, who in addition to being a politician is a prolific writer, in his new book , The French way (The French way). “Our independence is at stake: a nation in debt is a nation dependent on its creditors.”
Le Maire attributes the excessive deficit to last year’s drop in tax revenue. The low growth doesn’t help either: in 2024 it should be 1%, or lower.
The minister does not want to give up the goal of controlling the deficit in 2027, when the second and last five years of Macron’s presidency ends. At the same time, he refuses to deviate from the principle that he has applied since the president appointed him to head the super-ministry of Economy and Finance in 2017: not to increase taxes.
“You can save without digging into the pockets of the French,” Le Maire justified on the RTL network, the longest-serving incumbent – seven years – in the history of the V Republic, except for Valéry Giscard D’Estaing, who It was nine years, although in two different stages. “Our compatriots already pay an extremely high amount.”
From the left, the requests for the rich to pay return. The far right is alarmed by the prospect of adjustments to France’s robust welfare state. Éric Ciotti, leader of the moderate right, ironically made use of the nickname that Macron received when a decade ago he burst into French politics wrapped in an aura of a prodigy of numbers, due to his experience in banking, and his youth: “The last “Mozart’s symphony of finances is like a swan song.” Also in the Macronist majority there are voices in favor of increasing taxes.
Structural reforms
“If there are rebalancing measures, they should be directed towards those who have more means,” he declared to Europe 1 François Bayrou, leader of the centrist MoDem party and ally of Macron. These measures must be applied “without breaking the image of France that allows it to attract investors,” Bayrou urged. He alluded to the tax cuts and structural reforms that have turned it into a country business friendlya favorite European destination for international investors.
During these years, unemployment has been reduced to just over 7% and has disappeared from the horizon of French concerns. But the deficit and debt reduce the scope for developing the economy, as Pierre Moscovici, president of the Court of Auditors, former European Commissioner and former Minister of Economy and Finance, warned on the France Inter network.
“How do you want, with a debt at 110% of GDP, to invest in the future, in the ecological transition, in the digital transition, in national education, in research and development, in defense?” he said. the socialist Moscovici. “How are we going to finance the additional spending we must make for Ukraine if we are in debt?”
France, in the leading group of the most indebted European countries, is, in the euro zone, the one in which taxes and social contributions represent a higher part of GDP, 47%. And it is the country in which government spending represents the largest share in proportion to the economy, around 58%.
The Mayor lamented The French way that Francia “is unique [en Europa] for half a century due to its unbalanced public accounts.” Since 1974 it has not had a balanced budget.
From the minister’s reflection it emerges that there is something cultural in French debt. He remembers that the first king in debt was Saint Louis in the 13th century, due to the crusades. He was followed by the Renaissance Francis I. And Louis XIV who, according to the chronicler Saint-Simon, “loved splendor in everything, magnificence, profusion.” “The debt in France,” summarizes Le Maire, “is the price paid for the bigr, greatness.” Skeptically, he adds: “Or so it is believed.”