Constantly increasing, the French public debt has exceeded 3,300 billion euros. François Bayrou, new prime minister, inherits a worrying situation which he aims to rectify within ten years.
Debt, an ever-increasing burden
French public debt has reached a new historic milestone, peaking at 3,303 billion euros in the third quarter of 2024, or 113.7% of gross domestic product (GDP). According to INSEE, this increase of 71.7 billion euros in three months is mainly attributable to the State debt, which increased by 60 billion euros. Added to this are increases in the debt of social and local administrations, although more modest.
This situation worries economists and observers. “ At this level of deficit, France's credibility is at stake », warns economist Norbert Gaillard at Figaro. If the situation is not rectified quickly, rating agencies like S&P or Moody's could lower the rating of French debt, which would lead to an increase in borrowing costs. Ten-year bonds have already reached 3.07%, compared to less than 2.9% ten days earlier.
Since 2004, the debt has tripled, and France is today one of the rare European countries not to have reduced its debt since the Covid crisis. According to François Villeroy de Galhau, governor of the Bank of France, only Greece and Italy have higher levels of public debt in relation to GDP.
In this tense context, François Bayrou showed his determination to tackle the problem. The new Prime Minister, in office recently, announced a “ public finance rebalancing plan » over ten years. However, the details of its strategy remain unclear. During an intervention on France 2he ruled out the idea of overtaxing businesses while mentioning pension reform.
A colossal project and limited solutions
« We can find a different organization “, he declared, suggesting a departure at 64 years old. But any change to the pension system will have repercussions on public finances. The cancellation of the current reform alone would cost 8.2 billion euros per year, according to the Montaigne Institute.
The public deficit, estimated at 162.4 billion euros in 2024 (6.2% of GDP), is far from the 5% objective set by the previous government. Despite these alarming figures, François Bayrou strives to maintain a constructive perspective: “ We must respect the plan while finding a sustainable balance. »
The task promises to be arduous. In addition to reducing debt, policies must stimulate growth, according to François Geerolf, economist at the OFCE: “ Reducing debt without creating wealth will not solve the problem. » Measures such as increasing VAT, for example, risk curbing consumption without improving the efficiency of public services.
In a climate of political and economic instability, Agence France Trésor plans to borrow a record amount of 300 billion euros in 2025. A reality which illustrates the limits of an economic model where budgetary balance seems out of reach. 'achievement.
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