Yesyears of surprise, said Prime Minister Michel Barnier on Tuesday 1Ahem October, in his general policy speech, “our colossal public debt » and aims to massively reduce public spending, while considering “request participation (…) to large companies that obtain significant profits » AND “an exceptional contribution to the luckiest French people”.
He seems to follow Adrien Auclert, Thomas Philippon and Xavier Ragot, who, in a column, “Budget 2025: “The question is not whether to reduce the deficit, but how to do it without weighing too much on growth.” » (The world of September 17), note that “ The time has come for budget consolidation everywhere. » and advocate “ a reduction in the structural primary deficit of 4 points of GDP [produit intérieur brut]o 112 billion euros spread over seven to twelve years »with 20 billion this year, mainly through spending cuts.
These economists, who certainly do not exclude “ possibly temporary tax increases »evoke the “ Reduction of aid to companies by rethinking rate reductions. ». Let us remember that tax cuts or levies in favor of the richest families and large companies cost the state budget 76 billion each year and that the unrequited subsidies granted to companies are of the order of 170 billion. Therefore, the room for maneuver is real.
The specter of the Greek situation
However, it is the reduction of public spending that is favored in terms of public services, Health Insurance financing and complementary sickness insurance. Worse still, the authors come out in favor. “ a primary surplus [hors charge de la dette] of one point of GDP in the medium term »because, they tell us, “ To reduce debt it will be necessary to generate primary surpluses. »that is, having a lasting budget surplus.
Therefore, what they propose here is a massive and prolonged austerity cure that does not say its name, although they deny it saying that they want to try to find a point of balance in the speed of adjustment. The most important thing missing from these economists, as well as from the Prime Minister’s speech, is the state of the economy and society, both French and European. However, the euro zone today faces economic stagnation and France is not spared.
In such a situation, an austerity policy, implemented at European level, will be a worse remedy than the disease it is supposed to cure and will ultimately go against the desired objective. As long as business investment is at its lowest point and household consumption is stagnant or declining, reducing public spending will have a recessionary effect that will ultimately worsen the situation of public finances. A well-known phenomenon and one of which Greece has had bitter experience.
You have 55.23% of this article left to read. The rest is reserved for subscribers.
