The Superior Council of Public Finances (HCFP) asked the Government on Thursday for “decisive action” to contain public spending, at the risk of its debt becoming unsustainable, in an opinion published this Thursday on a bill relating to the 2022 budgets. A significant reduction in the structural deficit is necessary to reduce France’s exposure to the risk of unsustainable debt”, writes the independent body attached to the Court of Auditors and responsible for evaluating the credibility of the trajectory of public finances.
Public spending inflated by “whatever it costs”
Tapped for a government opinion on its 2022 budget review bill, which aims to validate last year’s public accounts, the HCFP notes that the level of this public spending relative to GDP “was maintained in 2022 significantly higher than its pre-crisis level.The public deficit reached 4.7% of gross domestic product (GDP) in 2022, that is, 124.9 billion euros, much more than in 2018 (2.3% of GDP ), under the effect of the increase in public spending, inflated by the “whatever it costs”.
Strongly disturbed by the health crisis, the economic situation was “in the process of normalizing” last year, despite the war in Ukraine, underlines the HCFP. Therefore, it asks the government to “quickly specify the conditions for lifting the exceptional circumstances clause”, which had allowed France to temporarily derogate from the European budgetary rules of the Stability Pact. These rules, suspended during the crisis, will be reactivated by the European Commission at the end of 2023. They limit budget deficits to 3% and public debt to 60% of GDP.
The 2022 liquidation bill must be presented this Thursday to the Council of Ministers, like the text related to the 2021 budget, which was rejected last August by the National Assembly.
Source: BFM TV
