“When I am told that the deficit in 2024 will be at 6.1%, it is the choice of the current government,” he said. “If all the measures that we had prepared (…) had been implemented without delay by the new government, coupled with the revenue measures on energy rents and on share buybacks with retroactive effect, they would have made it possible to contain the deficit for 2024 at 5.5% without tax increases.”
The public deficit is expected at 6.1% of GDP this year, a figure far removed from the 4.4% forecast for fall 2023 and the 5.1% forecast for spring after reassessment by the previous executive. It would only fall below the 3% of GDP authorized by the EU in 2029, making France a bad European student.
The reason, according to the former minister who left to teach in Lausanne (Switzerland), is the massive support deployed during successive crises, and this year revenue from compulsory deductions 41.5 billion euros lower than forecast.
Presidential “arbitration”
“There was no fault, no concealment, no desire to deceive. There was fundamentally a serious technical error in the evaluation of revenues, on which the minister does not comment, he stressed: there is “total impermeability” in order to avoid a risk of “manipulation” .
The chairman of the Finance Committee Claude Raynal (PS) estimated that the government had internal notes very early on which predicted a sharper slippage than expected, and that it was slow to take them into account.
Bruno Le Maire contested. Faced with the sudden deterioration of the economic environment at the start of 2024, leading to a lowering of the growth forecast from 1.4% to 1.1%, Bercy reacted “quickly, seriously and with full awareness of the seriousness of the situation », by canceling 10 billion euros of credits from February. During the summer, 16.5 billion euros of credits were frozen.
But the ex-minister regretted having failed to convince of the need in the spring for an amending finance bill for 15 billion euros. If the Minister of Finance proposes savings, “the arbitration” falls to President Emmanuel Macron, he underlined, however saying he was “in solidarity” with the decisions taken.
Then, after the dissolution of the National Assembly in June and despite a drift aggravated according to Bercy by the expenditure of local authorities, “we no longer had either the institutional legitimacy or the administrative levers to take strong measures”.
“Self-satisfaction”
“I note this kind of fireworks of collective and united self-satisfaction on your action which is paid for (…) at the high price (…) of a colossal and abysmal debt”, tackled the general rapporteur of the budget Jean-François Husson (LR). The debt is around 3,230 billion (112% of GDP), increased by a thousand billion since 2017.
The slippage in the deficit, after that already observed in 2023 at 5.5% of GDP against 4.9% forecast, has raised questions about the reliability of the forecasts of the previous Macronist majority.
Heard by the committee, the former Minister of Public Accounts Thomas Cazenave declared that three quarters of the worsening of around 50 billion euros in the deficit this year came from a problem in forecasting revenues; and the rest, from the “very rapid increase” in community spending, while that of the State is falling.
In addition to lower inflation, a less dynamic wage bill and growth driven more by foreign trade, “is this the effect of the exits from the crisis which are somewhat testing models which were very stable over time?” he is asked.
For the current Minister of the Economy, Antoine Armand, rather than “the search for individual responsibilities”, the poor health of finances requires a “capacity, collectively, to challenge ourselves to spend less”.
The Senate will hear former Prime Minister Gabriel Attal on Friday and his predecessor Elisabeth Borne on November 15, before the upcoming examination of the 2025 draft budget and the “60 billion” budgetary effort that it provides.
