The Court of auditors has raised alarm bells. In its annual report on the situation and prospects of public finances, she said to worry about the threat to France’s public debt which would not be controlled, and calls for an effort “in the term” to reduce “at a pace appropriate” once the French economy picks up again. “The rebalancing spontaneous public accounts, will, in all likelihood, that very part : no action to recover, the deficit may be sustainable very high, ( … ). The trajectory of the debt would not be controlled, ” warned the court.
The economic crisis caused by the pandemic Covid-19 is going to lead France to an unprecedented recession this year, with a fall in GDP, which could reach 11 percent and a public debt expected to swell to rise to 120,9 % of GDP, according to government forecasts. It has already warned that it expects a rebound in growth to ultimately reduce the debt of France, and that he would not raise taxes to repay the debt. The Sages of the rue Cambon have established three scenarios for the recovery of the activity, and even the most optimistic did not foresee a return to the level of debt before the crisis – is a little less than 100 % of GDP – by 2030.
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An “in depth review” of public spending
For the Court, “we must not expect everything from “growth” and “the recovery effort in structural public finances must be committed” as soon as economic conditions allow. “It must not be too brutal to not break the recovery, but it must be consistently pursued to achieve tangible results “, she adds, calling for the definition of a trajectory in an act of the programming of public finances “at the latest” next spring.
The Wise men call an “in depth review” of public spending, to prioritise capital investment, particularly in the ecological transition and health, in parallel with an ” increased effort to control other expenses “. The conditions of low interest rates are “favorable” to such decisions, make the case-they warned, however, risks the “sustainability” of the debt in the event of rate hikes. In addition, the stimulus package that plans to deploy the government at the start of the school should contain support actions ” temporary and targeted, without funding additional public debt, writes the Court.
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