The deterioration of the deficit in 2023, which reached 5.5% of GDP instead of the 4.9% initially planned by the government, “does of course not mean the bankruptcy of France”, wanted to reassure François Villeroy de Galhau, governor of the Bank of France who nevertheless calls on the executive to take “finally serious” responsibility for public spending.
The governor of the Bank of France, François Villeroy de Galhau, estimated on Thursday that the slippage in the deficit in 2023 made it necessary to deal “finally seriously with public spending”, after “fifteen years” without governments holding (…) their commitments.” “It has been fifteen years since our country and its successive governments have not kept their multi-year commitments to recover” public accounts, regretted the governor during a speech at Paris Dauphine University, of which AFP consulted a copy.
The deterioration of the deficit in 2023, which reached 5.5% of GDP instead of the 4.9% initially planned by the government, “does of course not mean the bankruptcy of France”, he sought to reassure , but it calls for an “imperative”. We must finally take care of public spending “seriously,” insisted François Villeroy de Galhau. And this, “before taking any potentially necessary decisions on taxes”, he said, in reference to recent proposals aimed at taxing companies’ “superprofits” or carrying out targeted tax increases.
The government maintains its objective
Despite the slippage in 2023, the government maintained its objective of reducing the public deficit below 3% of GDP in 2027, as promised to its European partners. To achieve this, he intends to make a new turn of the budgetary screw. Ten billion euros in savings have already been made for 2024, and 20 billion cuts are announced for 2025. But “additional savings” will be necessary, according to the Minister of the Economy and Finance Bruno Le Maire.
“I deeply believe in the European social model but it costs us in France around ten points of GDP more than our European neighbors: 58 against 48 as a percentage of GDP,” argued François Villeroy de Galhau, emphasizing that public spending in volume “could still increase by more than 2% in 2024”, according to projections from the Court of Auditors.
A new meeting on April 9
“It is high time, not to decree austerity and a general reduction in spending, but to achieve this general stabilization in volume,” detailed François Villeroy de Galhau. “This requires an effort of prioritization and efficiency, fair and shared by all: State, but also local authorities and social services”. Parliamentarians from the majority and the opposition were invited to the Ministry of the Economy and Finance on Thursday to propose ways to save money.
A second meeting in Bercy has been announced for April 9, this time to look, with associations of local elected officials, for potential savings within local authorities.
https://www.europe1.fr/economie/la-banque-de-france-abaisse-a-08-sa-prevision-de-croissance-en-2024-4235518
Source: Europe1
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