“They are incapable of it”: Has France succeed at least once to really reduce its public expenses since 1980?

“Whatever it costs” to “whatever happens.” When announcing a necessary budget effort of 40 billion euros in 2026, the Government confirmed last week its desire to reduce the public deficit to 4.6% of GDP in 2026 at all costs. A commitment that will go “essentially” for cuts in public spending, promised the Minister of Economy, Éric Lombard. Or more specifically by a brake on the acceleration of expenses.

Because in reality, public spending will increase well between 2025 and 2026. The effort of 40 billion announced must be understood in relation to what Bercy officials call “trend growth”, that is, in relation to the amount that the expense would have reached spontaneously with an unchanged policy.

Public spending is naturally progressing every year, in particular because several social benefits are indexed to inflation or because the aging of the population mechanically increases health spending. Therefore, the objective of the government is not to spend less next year, strictly speaking, but spend less than planned.

This “automatic” increase makes an approach more complex to reduce In fact And public expenses permanently, which should be around 1,700 billion euros in 2025, or almost 430 billion more than ten years. Even by neutralizing the impact of inflation on its evolution, public spending “in volume” has increased almost in the last 45 years. Since 1980, it has only decreased three times: in 2015 (-0.3%), in 2018 (-0.64%) and in 2023 (-1.5%).

The weight of public spending in GDP increased by 9 points since 1980

Another way to understand the evolution of public spending is to measure its weight in national wealth. Because if the expense increases at the same speed as growth or even more slowly, they become much more sustainable. But this has not really been the case in recent decades.

In 2024, public spending represented 57.1% of GDP according to INSEE. A greater relationship for the first time since 2020, but has remained relatively stable in the last 15 years. So there is no improvement, but there is also no landslide. However, during a long period, the general trend is clearly increasing: +9 points since 1980 (48%).

The relationship between public spending and GDP experienced several fluctuations: it evolved between 1980 and 1985 (54.2%), then decreased until 1989 (50.9%) before leaving in the early 1990s (56%in 1996) and reflecting again to 2000 (52.6%). Closer to us, he experienced a spectacular but temporary leap twice: in 2009 (from 54.3 to 58%), as well as in 2020 (from 55.3 to 61.7%).

This trend in “Yoyo” is above all the reflection of the cyclic shock. Secondly, Petrioli Shock in 1979, a strong growth in the late 1980s, recession in the early 1990s, financial crisis in 2008-2009, a Covid pandemic … in times of crisis as in the rebound period, it is more the evolution of GDP than that of public spending that issued the trajectory of the indicator.

In the same way, the end of exceptional aid after the Covid period also contributed to its decrease.

But “beyond cyclic fluctuations, there was almost no structural effort” to reduce spending, estimates Éric Dor, professor at the IESEG School of Administration. And even when the public spending/GDP ratio dropped mechanically after a period of degraded economic conditions, he has never “completely found” his initial level, the economist continues.

A often unpopular measurement

Cut public spending is much easier to say: “Historically, in all countries of the world, as soon as a high level of public spending reaches, it is very difficult to return” without making unhappy, he grants to Éric dor.

An observation shared by Éric Heyer, director of the analysis of the department and prognosis in Ofce: “It is easy to say that we will reduce public spending. But then, when we enter the details of this public spending, it harms someone,” he explains about BFM businesses. Before adding: “It is so heterogeneous. There is help for companies, payments of public officials, social expenses, including pensions, diseases …”. In summary, budget cuts necessarily make losers, which is, by definition, is unpopular. According to a recent Elabe survey for BFMTV, 84% of the French believe that François Bayrou is right by saying that there are too many public expenses in France, but only 28% agreed to reduce social spending.

Under these conditions, governments since the 1990s “cannot assume political measures that would” reduce the public deficit, even if everyone wants to achieve it “to reassure our creditors, reassure our European partners, show that we are on the nails of the European rules,” observes in BFM Business François Ecalle.

Some governments have sometimes used less brutal recipes in appearance than an immediate fall in public but effective spending to avoid unless uncontrollable. The balrade reform in 1993, for example, indexed retirement pensions on prices and no longer on salaries. A more acceptable decision than directly reducing the level of pensions. But “since inflation progresses more slowly than wages”, the weight of the expense in GDP should decrease and “this is how we are happening gradually, without saying it” to master public spending, says Éric Heyer.

Greater public spending than in other places

With our neighbors, public spending has followed approximately the same trajectory as in France since 2010. But France goes a lot above. Today it shows one of the highest levels of public spending in the world. By way of comparison, public spending represented an average of 50% of the GDP of the euro zone in 2023, 48.6% in Germany, 46.4% in Spain and 55.2% in Italy.

Should we deplore these differences? He does not necessarily agree with Éric Heyer, who refutes the speech according to which this surplus of public expenses in France is “only waste” that “nobody benefits.” “It is a bit more complicated than that” since it is thanks to this level of spending that we have “a lower poverty” than in our neighbors. To think that drastic cuts “would not change the poverty rate is to make mistakes,” he said.

However, it is also possible to estimate “that we could have gone too far and that it is discouraged at work,” he acknowledges the economist. Ultimately, it is difficult to place the cursor on a threshold that would be considered optimal.