2024-10-01 21:24:47
“The real sword of Damocles is our colossal financial debt, 3,228 billion, which, if we are not careful, will place our country on the edge of the precipice. » The Prime Minister, Michel Barnier, chose to devote the first part of his general policy speech, Tuesday 1is October, to the need to reduce the public deficit to reduce it from 6% of gross domestic product (GDP) in 2024 to 5% in 2025, before returning to 3% by 2029.
The head of government affirmed that two-thirds of the savings would come from a reduction in spending – while remaining vague on the details – and a third from an increase in taxes. In recent years, many other European countries have gone through periods of austerity, offering instructive lessons about the risks of this policy and its possible social breakdown – as in Greece or Spain –, but also about the dangers of a drift in public finances if they are not controlled – as in Italy.
Céline Antonin is an economist at the French Observatory of Economic Conditions (OFCE) who has in turn studied Greece, Italy and Germany: a country which went bankrupt, another which accumulated debt over the years 1980 which still strikes him today and a third who avoids public spending even when he could spend. From these three different errors, a nuanced conclusion emerges: the budgetary approach depends on the economic situation. “We must avoid making cuts in the middle of a recession, a mistake we made during the euro zone crisis”she explains. Conversely, France records a deficit of 6% of GDP, even though growth is around 1% and unemployment has fallen, which, according to it, justifies a budgetary effort.
In France, nearly 30 billion euros to be found in 2025
By announcing a budgetary effort estimated at nearly 30 billion euros, the French government is not initiating austerity similar to what was implemented elsewhere in Europe during the euro zone crisis. “We are talking about something around 1% of GDP. It has nothing to do with what was done in peripheral countries”underlines Gilles Moëc, chief economist at Axa.
The most extreme case was that of Greece, which reduced its structural deficit (excluding cyclical effects) from 13% of GDP in 2009 to 2.7% in 2011. “The consolidation was 10 points of GDP, it was monstrous”continues Mr. Moëc. Likewise, the effort was extreme in Spain, with 4 points of GDP less between 2011 and 2012, and 8 points spread over four years. As for the government that came to power in 2010 in the United Kingdom, it organized cuts that were a little more gradual, but very harsh overall: 4.8 points of structural deficit in less than four years.
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