“The real sword of Damocles is our colossal financial debt, 3,228 million, which, if we are not careful, will place our country on the brink of the precipice. » The Prime Minister, Michel Barnier, decided to dedicate the first part of his general policy speech, on Tuesday 1Ahem October, to the need to reduce the public deficit to reduce it from 6% of gross domestic product (GDP) in 2024 to 5% in 2025, before returning to 3% in 2029.
The head of government stated that two-thirds of the savings would come from a reduction in spending – although he remained vague on the details – and a third from an increase in taxes. In recent years, many other European countries have gone through periods of austerity, offering instructive lessons about the risks of this policy and its possible social collapse – as in Greece or Spain – but also about the dangers of a diversion of public finances if They are not controlled, like in Italy.
Céline Antonin is an economist at the French Observatory of Economic Conditions (OFCE) and has studied Greece, Italy and Germany: a country that went bankrupt, another that accumulated debts throughout the 1980s, something that still surprises her today, and a third that avoids public spending even when it could spend. A nuanced conclusion emerges from these three different errors: the budget approach depends on the economic situation. “We must avoid making cuts in the middle of a recession, a mistake we made during the euro zone crisis”explains. On the contrary, France registers a deficit of 6% of GDP, although growth is around 1% and unemployment has decreased, which, in its opinion, justifies a budgetary effort.
In France, nearly 30 billion euros will be raised in 2025
By announcing a budget effort estimated at nearly 30 billion euros [et même 40 milliards selon les chiffres présentés mercredi 2 octobre]The French government is not initiating austerity similar to that implemented elsewhere in Europe during the eurozone crisis. “We are talking about around 1% of GDP. “It has nothing to do with what was done in peripheral countries”underlines Gilles Moëc, chief economist at Axa.
The most extreme case was that of Greece, which reduced its structural deficit (excluding cyclical effects) from 13% of GDP in 2009 to 2.7% in 2011. “The consolidation was 10 points of GDP, it was monstrous”Moëc continues. Likewise, the effort was extreme in Spain, with 4 points of GDP less between 2011 and 2012, and 8 points spread over four years. As for the Government that came to power in 2010 in the United Kingdom, it organized slightly more gradual cuts, but overall very harsh: 4.8 points of structural deficit in less than four years.
You have 74.05% of this article left to read. The rest is reserved for subscribers.
