“The real sword of Damocles is our colossal financial debt (…) which, if we are not careful, will place our country on the edge of the precipice”, affirmed Michel Barnier before the deputies, committing to a “truth” speech on public accounts during its general policy declaration.
France’s public debt continued to swell at the end of June, reaching 3,228.4 billion euros – or 112% of gross domestic product (GDP) – at the end of June, while the public deficit is expected to exceed 6% in 2024. This is very far from the maximum of 60% of GDP set by European budgetary rules, which also set a public deficit of maximum 3% of GDP.
To restore very degraded public finances, and reduce the public deficit to 5% of GDP in 2025 then “under the 3% ceiling” in 2029, two years later than the deadline set by the previous government, Michel Barnier intends to reduce spending while playing on the fiscal lever.
“The first cure for debt is reducing spending. In 2025, two thirds of the recovery effort will therefore come from reducing spending. Reducing spending means giving up magic money, the illusion of everything being free, the temptation to subsidize everything,” he said.
However, “participation in collective recovery” will also be requested “from large companies which make significant profits” as well as “an exceptional contribution” from “the most fortunate French people”, in the name of the “demand for tax justice”. he added.
