Reforming pensions would have had the double advantage, for Emmanuel Macron, of convincing not only the voters, but also the European Commission of his desire to transform the country. Otherwise, the government must be satisfied for the moment to send signals to the second. With a deficit of 9% and a debt of around 120% of gross domestic product (GDP) this year, France has, in fact, public finances whose situation is clearly more degraded than the European average after nearly ten – eight months of pandemic. And even if Brussels has authorized the countries of the euro zone to derogate from the budgetary rules of the stability pact until the end of 2022, Paris must give it pledges.
“To restore public finances, growth alone will not be enough”, warned the Minister of the Economy, Bruno Le Maire, in The Sunday Newspaper, July 18, pleading for spending cuts and again promising not to raise taxes. The stability program sent to Brussels in April, which lists the government’s reform projects, mentions the need to improve “Governance of public finances” in order to better control its evolution. A site on which parliamentarians have been working for nearly three years, but whose outcome had been postponed because of the Covid-19 epidemic.
Modernize the “Financial Constitution”
Monday evening, the deputies adopted a proposal for an organic law carried by the general rapporteur for the budget, Laurent Saint-Martin (La République en Marche), and the chairman of the finance committee, Eric Woerth (Les Républicains), but supported by Bercy, to the point that Mr. Le Maire has made his main measure his own. “I am proposing a rule which would set a maximum amount of expenditure over five years, he indicated to JDD. We need to make clear choices about which ones we favor, and which ones we give up. “
Far from being a replica of the “golden rule” of budget balance imposed by Germany, this text aims more modestly to modernize the “Financial Constitution” which is the organic law relating to finance laws. (LOLF) dating from 2001. It aims to regulate the evolution of public spending by setting a multi-year ceiling. The volume of public administration expenditure, but also their increase from one year to the next would thus be contained over several years (the period will be defined by the executive), not exceeding an amount stated in billions of current euros. A novelty compared to the current programming laws which essentially set a deficit target. These ceilings would then be detailed by sub-categories (State, Health insurance, etc.), and relayed in the annual finance laws.
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