The Minister of Economy and Finance Bruno Le Maire on Thursday defended the government’s strategy of supporting growth and structural reforms to restore public finances in the coming years, the day following the alert from the Court of accounts. “We are going to have to restore our public finances once more, only we are going to do it on the basis of a different strategy from the one that has failed in the last decades (…). Our strategy is first of all growth and investment, structural reforms and savings where necessary,” declared the guest minister of TV5Monde.
“Austerity, rigor, it does not work. It leads to more debt, more deficit, more unemployment and less growth, ”he said, referring to the strategy put in place following the financial crisis of 2008-2009. “We cut with an ax, blindly, in public spending, in the number of civil servants. What happened in 2012? Exactly less growth, more unemployment and more debt,” said Bruno Le Maire.
After two years of “whatever it costs” to fight once morest the health crisis, the Court of Auditors warned on Wednesday that France was going to have to make “unprecedented efforts” to control public spending. The debt should reach around 113% of GDP at the end of 2022, according to government forecasts, and the deficit 5% of GDP.
“Then we also need structural reforms”
The government’s scenario is to bring the public deficit below 3% of GDP in 2027 to start reducing the debt burden, a trajectory that the Court has deemed “uncertain” and which, according to it, would require around 9 billion euros. euros of additional savings per year.
“We have set up a different strategy which is to say we invest, we create growth, and growth gives us room for maneuver which is absolutely considerable (…) then we also need structural reforms”, defended Bruno Le Maire, crediting the current five-year term with the reform of unemployment insurance, labor law, simplifications for companies.
“Obviously we have to reduce public spending, by using digitization, digitalization. We did it for example on the withholding tax, we can very well do it for social benefits, ”he said.
