Pierre Moscovici, first president of the Court of Auditors. - Christophe ARCHAMBAULT / AFP
France in the red after the coronavirus epidemic. The Court of Auditors is concerned about an uncontrolled public debt in France. In its annual report, it calls for an effort “in the long term” to reduce it as soon as possible, when the French economy will be better.
“The spontaneous rebalancing of public accounts will, in all likelihood, only be very partial: without recovery action, the deficit risks being durably very high (…). The debt trajectory would then not be under control, ”warns the Court in its annual report on the situation and outlook for public finances.
Back to normal in 2030?
The economic crisis caused by the Covid-19 pandemic will lead France to an unprecedented recession this year, with a fall in GDP which could reach 11% and public debt which should swell to reach 120.9% of GDP , according to government forecasts. The latter has already warned that he was counting on the rebound in growth to reduce France's debt over time, and that he would not raise taxes to repay the debt.
Les Sages de la rue Cambon have drawn up three scenarios for the recovery of activity, and even the most optimistic does not foresee a return to pre-crisis debt levels - just under 100% of GDP - here in 2030. For the Court, "we should not expect everything" from growth and "an effort to structurally restore public finances must be undertaken" as soon as economic conditions allow.
An effort neither too "brutal" nor too shy
"It must not be too brutal not to break the recovery but it must be pursued constantly to obtain tangible results", she adds, calling for the definition of a trajectory in a public finance programming law "At the latest" next spring.
The Elders thus call for an "in-depth examination" of public spending, to prioritize investment spending, particularly in the ecological transition and health, in parallel with an "increased effort to control other spending". The low interest rate conditions are "favorable" to such decisions, they argue, on the other hand warning of risks on the "sustainability" of the debt in the event of a rise in rates. In addition, the recovery plan that the government plans to deploy at the start of the school year will have to contain "temporary" and targeted support actions, without funding from an increase in public debt, the Court said.
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- Covid 19
- Public debt
- Court of Audit