PARIS (Reuters) – The stability program that the government is preparing to send to the European Commission, relating to the trajectory of France’s public finances by 2027, is based on optimistic forecasts and imprecise promises of reforms , said Pierre Moscovici, president of the High Council of Public Finances (HCFP), in an interview published Thursday on the Figaro website.
Pierre Moscovici is also concerned that France is reducing its debt more slowly than most of its neighbors, which risks depriving it of a “margin of safety” as interest rates rise.
“The trajectory of public finances is based on a somewhat optimistic growth forecast, on spending cuts at this stage undocumented and on an assumption of an increase in the rate of compulsory levies allowed by the elimination of tax loopholes, highly desirable, but whose experience shows the difficulty of implementation”, declares the one who is also president of the Court of Auditors in Figaro.
“To be honest, this situation alerts us all the more that a significant rise in interest rates could result in a sharp rise in debt interest charges.”
Pierre Moscovici also regrets an “unambitious” public finance recovery trajectory, with a public deficit reduced to below 3% of gross domestic product (GDP) in 2027 only, i.e. later than most other countries in the euro zone.
“If France is the country that makes the least effort on its debt, it will eventually show,” he said.
The HCFP will officially issue its opinion on Friday morning.
(Written by Bertrand Boucey, edited by Jean-Michel Bélot)
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