Are the savings announced by the French government really the result of European budgetary rules?
Every week before the European elections, Marianne answers a question you ask yourself about the impact of decisions taken in Brussels on the daily lives of French people. You can send your questions to [email protected].
A course maintained against all odds. Even if the accounts drifted last year, the government is keeping as a compass a return of the public deficit below 3% in 2027. Last year, state expenditure exceeded its revenues by 5.5% of GDP , while a deficit of 4.9% was anticipated. We would therefore have to redouble our efforts to arrive safely, even though the executive asserts that it does not want to hamper growth with hasty austerity.
But why exactly insist on a goal that is increasingly difficult to achieve? Would the Macronist team have its hands tied by European rules, which set the 3% limit as a ceiling not to be exceeded?
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Last fall, the Minister of Public Accounts justified his course by the imperative of not appearing as a budgetary dunce. “ France cannot stand out from its European partners. We could be the last European country whose deficit falls below 3% », argued Thomas Cazenave on September 27, during the examination of the public finance programming bill at the Assembly. The member of the executive presented this text as “ a central element of our credibility “, whether it be ” towards our European partners “, ” towards investors who buy our debt ” Or ” towards the French “.
Binding milestones
The government therefore seems keen not to stray too far from European rank. Moreover, even if it managed to meet its objective, it would still not be in compliance with the budgetary criteria. These are in the process of being modified: the States of the European Union (EU) have agreed on a new version of the “ stability pact », which must still be validated by the European Parliament. The main lines will remain defined by the Maastricht Treaty of 1992, under which States must maintain a deficit below 3% of GDP and a debt below 60% of GDP. Those who exceed these “ reference values “can nevertheless escape the blow, if their accounts improve” at a satisfactory pace “.
It is to redefine this rhythm that the member countries have increased the number of talks, until reaching an agreement in December. For each State in difficulty with the criteria of the treaty, the European Commission will now set personalized objectives, supposed to put the offender back on the right budgetary path. But this flexibility will be very regulated: Brussels will have to make each trajectory follow predefined milestones, which Germany has obtained the addition of in the text.
READ ALSO : EU budgetary rules: how France backed down against Germany
In all cases, States will have to reduce their debt by 1% of GDP per year, for those where its level exceeds 90% of GDP. This is the case of France, whose public debt amounts to 110.6% of GDP. However, respecting this “safeguard” requires a brutal adjustment: to meet it in 2024, the State would have had to reduce the deficit to 2.9% of GDP, according to our calculations based on budget documents. That is to say, immediately improve its accounts to the tune of… 73 billion euros, seven times more than the savings announced in February!
“Do not anticipate the interpretation”
The trajectory set by the government does not provide for anything of the sort. According to its “stability program” published this Wednesday, April 17, the debt would even increase to reach 113.1% in 2025, before falling to 112% in 2027. Is this an assumed disobedience to the new rules? “ No one has yet seen how exactly these rules workreplied a spokesperson for the Ministry of Finance, during a press conference organized on April 10. We have not yet had discussions with the Commission, which will begin in June and last until the fall. (…) We are not going to anticipate the interpretation of the rules. »
The constraints provided for by the agreement, however, seem quite clear. But it is true that their implementation will depend on the state of mind of the Commission, which is maneuvering to apply the ” stability pact “. This is also an issue in the June elections: the commissioners will be renewed following the European vote, upon approval by Parliament. Ultimately, Brussels can impose a fine on a recalcitrant country (unless a qualified majority of States opposes it). This levy can be applied every six months and reach 0.05% of GDP, or 1.4 billion euros for France.
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In fact, such sanctions have never been imposed to date. And in the worst case, Paris could have an interest in paying the painful price, rather than submitting to a treatment that is harmful to the economy. Indeed, respecting the new criteria “ would involve significant efforts and drastic choicestold us in December Jérôme Creel, researcher at the French Observatory of Economic Conditions (OFCE). Ecological and defense spending could certainly be preserved, but it would be to the detriment of everything else. » The executive will see things more clearly this summer: Brussels should then decide whether or not it places certain States in “ excessive deficit procedure », a sort of purgatory prior to possible sanctions. The starting point for a proper showdown?
