France has reached its “alert rating” on public finances, estimated the Minister of the Economy Bruno Le Maire, Monday, June 27, at a time when the executive is seeking a compromise with the opposition for its bill on purchasing power.
“Not everything is possible, simply because we have reached the alert level on public finances”affirmed the Mayor, adding that “the financing conditions have changed” and that today France is borrowing “more than 2%” to finance public spending, when it did so recently at negative or very low rates.
Asked about the proposal made by several opposition parties, such as Les Républicains or the National Rally, for a reduction in fuel tax, Mr. Le Maire assured that the government would ” discuss “ with these formations but that “The spirit of compromise must be accompanied by a spirit of decision”.
“When inflation increases, the debt burden also increases by several billion euros, and my responsibility as Minister of Finance, I hope everyone hears, is to return to balanced public finances by 2027”he insisted, in a message to the deputies of the oppositions as to the framework of the debates that the executive wishes to impose on the National Assembly.
For its part, the government will propose in its future bill on purchasing power the increase, retroactive to 1er July, 4% of several social benefits to fight against inflation. According to information from Worldthis is a budgetary effort of around 6.5 billion euros in 2022, and nearly 1.5 billion in the 2023 financial year. A large part of this expenditure will be devoted to increasing pensions paid by the basic schemes, its cost being around 5 billion euros for 2022. The project does not contain the thawing of the index point for civil servants, also announced by the government.
“It is imperative to reduce public debt”
According to the National Institute of Statistics and Economic Studies (Insee), French public debt exceeded 2,900 billion euros at the end of the third quarter, or 114.5% of gross domestic product (GDP), due to also from sluggish economic growth. It is not this amount that “concerned” Mr. Mayor, but the fact that “the financing conditions have changed” for France, with the rise in interest rates which has begun and will continue, with the European Central Bank seeking to reduce inflation.
“Part of the debt burden is indexed to inflation”recalled the Minister in particular, which represents “several billion euros” to spend to pay off this charge each year. “Politics is about choices (…) It is imperative to reduce the public debt”but “We must at the same time protect our compatriots who are the most fragile, but protect them responsibly. »
On the right, the new president of the Les Républicains group in the National Assembly, Olivier Marleix, strongly insisted on the risk of an increase in the French debt, Monday morning on Europe 1, a few minutes before Mr. The mayor. “On the question of purchasing power and such a problem for our compatriots, obviously we will do everything to converge with the government” and “move forward on these measures”declared the deputy for Eure-et-Loire while the Republicans, if they refuse to participate in the government, assure that they will possibly vote for texts ” case by case “.
However, Mr Marleix laid down two conditions: the need to take into account the fact that the question of purchasing power is “a major subject for working France”and “Obviously, the government will have to agree to consider the issue of financing these measures”.
“We will be demanding of the government so that it is funded. The French debt situation today is very serious (…) The government cannot say: “Come on, 30 billion more debt!” It would be irresponsible.”he said, promising that the LR deputies “will make proposals on the subject of financing”.
On the left, the deputy and national secretary of the French Communist Party, Fabien Roussel, wished on CNews “a sharp increase in purchasing power” with notably “an immediate reduction in VAT on petrol”. “We will not be satisfied with crumbs” and “we will all take to the streets if necessary to obtain these measures”he warned.