The reality had to be officially admitted one day or another. Michel Barnier took care of it, Tuesday 1is October, in its general policy declaration: the cardinal commitment made by France to reduce its public deficit to less than 3% of gross domestic product (GDP) in 2027 will not be kept. The horizon is shifted by two years. “Our objective is to put our country back on the right trajectory to return below the 3% ceiling in 2029,” declared the Prime Minister in front of the deputies. To achieve this, he plans a sharp reduction in public spending, but also “exceptional contributions” aiming “the most fortunate” and large groups. A clear shift in the economic policy pursued for seven years.
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Listening to it, the ears of Emmanuel Macron and Bruno Le Maire must have whistled. During his farewell to Bercy on September 12, the former Minister of the Economy urged the future government not to abandon the objective of 3% in 2027 hammered out by the President of the Republic. “ It’s entirely within our reach,” he assured. Michel Barnier did not follow him. Like almost all economists and experts, the new tenant of Matignon deemed it politically and socially impossible to reduce the deficit in such a brutal way, given the current slippage in public accounts.
While avoiding direct attacks, the Prime Minister did not hide the scale of the disaster left by the previous government. The deficit of the State, local authorities and Social Security? Far from falling as expected, it should this year “exceed 6%” you PIB, et “would be even higher” in 2025 “if nothing was done”. The debt made necessary to cover this deficit? « Colossal », said Michel Barnier. Amounting to 3,228 billion euros at the end of June, it “will place our country on the edge of the precipice”, at least “if we are not careful.”
90 billion euros to find
“The real sword of Damocles is there, on the head of France and all French people”, he insisted, emphasizing how much “These figures have nothing to do with the forecasts at the start of the year, nor with the trajectory promised to our partners.” This drift “weakens” the position of France in Europe, and hinders the action of the State, he noted: the debt burden already constitutes the second budget of the State, behind education, and risks weigh down again.
For the rest, the calculation is quite simple on paper: reducing the deficit from more than 6% to 3% of GDP requires finding at least 90 billion euros excluding inflation, by reducing spending or increasing revenue. Or doing both at the same time. Michel Barnier wants a significant part of this plan to be implemented by 2025, by reducing the public deficit to 5% of GDP. This is less ambitious than the target of 4.1% of GDP targeted so far for 2025. This nevertheless represents an adjustment of around 30 billion euros in one year, 35 billion perhaps if the deficit climbs to 6.2% or 6.3% of GDP in 2024 as some fear.
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