The government expects this year to a historic recession of -11%, with a swelling of the public debt to around 121 percent of gross domestic product.
The government should not wait for programmer "in the term" the effort of deleveraging in public finances, warned Tuesday the Court of auditors, while the public debt will soar this year as a result of the crisis.
"The sustainability of the debt is more than ever a major challenge, if not the key challenge for public finances", said his new first president, Pierre Moscovici, during a press conference to present the annual report of the authority on the situation and prospects of public finances.
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While the government is counting on a rebound in growth next year to reduce debt and excludes any tax increases, the Court considers that no action of recovery, the deficit may be sustainable very high, ( ... ). The trajectory of the debt would not be controlled".
The government expects this year to a historic recession of -11%, with a swelling of the public debt to around 121 percent of gross domestic product (GDP), before a rebound in the economy next year. But for the Court, "it is not necessary to expect anything" of growth, because even the most optimistic scenario of a rapid recovery will not allow France to regain its level of debt before crisis by 2030. And this one, almost 100% of GDP was already cause for concern before the crisis by the Court, who sticks the nail in this report.
"France has not addressed this crisis with the public finances restored", she notes, pointing to a "fatigue-budget" recurrent of the various governments that have reduced public spending and the deficit. However, for the Court, the effort "must not be too brutal to not break the cover, but it must be consistently pursued to achieve tangible results". "The Court calls for the serious (...), the predictability, in any case, the austerity," said Pierre Moscovici.
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The institution called the government to set a trajectory of deleveraging in the future law on the programming of public finances "at the latest" next spring. "There is no need to wait," said Pierre Moscovici. It would also enable France to show Brussels its willingness, in the prospect of a lifting of the derogation to the european fiscal rules.
Separate the "debt Covid"
This path must in particular provide for 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", judge of the Court.
in addition, it makes new tax cuts to "increases in other removals or deletions of niches," or to "an effort even greater spending control". The government plans to decrease the taxes of production, which weigh heavily on enterprises in the framework of its recovery plan expected at the start of the year. For the Court, the measures in this plan will need to be "temporary" and targeted, without funding by a greater debt burden.
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The conditions of low interest rates are "favorable" to such decisions, she advocates, then there is a risk on the "sustainability" of the debt in the event of rising rates, as well as a worsening of the gap with the other countries of the euro area.
In this case, "if it had not decreased its public debt in relation to GDP, France will find itself in a very difficult situation", with the risk of surging even more massive debt and to difficulties to finance it, or alert the Court.
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Monday, the Economy minister Bruno Le Maire, announced that the government would deal with aside from the public debt after the crisis. This debt, "we will refund confining and separating it from the 100 points of initial debt", he said before the deputies. Has the image of what he has done to the social debt, confined in the CADES (caisse amortisation of the social debt), with a schedule until 2033, Bruno le Maire, has referred to the date of 2042 for the repayment of the debt Covid. The first president of the Court of auditors has refused to comment on this proposal that the instance 'n'(a) not valued".