Attacked by Bercy, local authorities denounce “false” figures

Comments from resigned ministers “cool”even “irresponsible”numbers “wrong” : Accused by Bercy of causing a diversion of public accounts due to expenses considered excessive, the local authorities counterattacked on Tuesday, September 3, casting doubt on the “the disastrous situation” of state finances.

In a letter sent on Monday to the presidents of the finance committees of the National Assembly and the Senate, Bruno Le Maire, the outgoing Minister of Economy and Finance, and Thomas Cazenave, the minister responsible for public accounts, estimated that the “main risk” for the public accounts of the year 2024 was linked to a “extremely rapid increase in community spending”.

These community expenses alone could “Reduce the 2024 budget by 16 billion euros”This is expected to further increase France’s public deficit, which is already the subject of a European excessive deficit procedure, according to Bercy.

“It is surprising that the resigned ministers allow themselves to make judgements using totally misleading figures”André Laignel, president of the Local Finance Committee, reacted to Agence France-Presse (AFP), saying that he does not understand “Where do the 16 billion come from?” mentioned by the ministers.

In a press release, the Association of Mayors of France (AMF) denounces the situation “disastrous for the State’s accounts” and also highlights that the debt of the communities “It has remained stable for 30 years or even decreased slightly, going from 9% of GDP in 1995 to 8.9% in 2023”. “The resigning government seems unaware of its own vileness”added the Urban France association, when Intercommunalités de France sees in the ministerial letter a desire “divert attention from state budgetary misappropriations”.

“Demagogic and false”

Local government spending accounted for 19% of public spending in 2022, compared to 40% for the State, according to INSEE. But if the State deficit reached 155.7 billion euros in 2023, an increase of 7.3 billion euros in one year, the financing needs of the communities, which are obliged to vote for a balanced budget and can only resort to borrowing for investment expenditure, represented 5.5 billion euros, according to the Observatory of Local Public Finances (OFGL).

In 2023, the operating expenses of the communities increased more than the income, notes the OFGL, recalling the “Context of marked inflation”while investment spending increased by 6.7%. In particular, according to the AMF, the “Double pressure from the state-decided salary increase measures for public employees and the increase in the cost of energy and current purchases”.

The powerful association also cites new expenses “that the government and parliament have placed responsibility on the communities” in the environmental, transport or early childhood fields. “Sixteen billion is a huge figure. We are outraged that figures are being floated that are neither verified nor disputed.”He harshly criticised Antoine Homé, co-president of the AMF’s finance committee, judging the figure “demagogic and false”. “We are in a period in which this resigned government should restrain itself in its public expression, I am truly dismayed”he added.

Stéphane Perrin, from Régions de France, reminds us that the regions “We are the only ones who have assumed the costs of inflation in public transport, in energy bills in secondary schools and the increase in interest rates”. “For someone to blame us for the deterioration of the nation’s finances is frankly irresponsible”thunders. Others, such as Christophe Bouillon, president of the Association of Small Towns of France, point out the contradictions between “the demand for public authorities to invest in the ecological transition and the usual criticism for spending too much”.

According to the elected mayor of Barentin (Seine-Maritime), the expenses are also related to “municipal cycles”. “We usually spend two years at the beginning of the mandate drafting projects, two years launching markets and then two years of implementation, which constitute all the investment peaks”observe.

While France still has no government, Villes de France considers the budget for 2025 “it is prepared in the greatest opacity”fearing “sanctioning arbitrations for the territories”in particular a “Green Fund budget cut”.