New Caledonia officially contracted a loan of 175 million euros from the State on Friday, after a previous loan in 2020, bringing the community’s debt ratio to a record level, which will impose savings and reforms.
This loan, guaranteed by the State and authorized in the 2022 finance law, was signed between the president of the collegiate government, Louis Mapou, Patrice Faure, High Commissioner of the Republic in New Caledonia, and the representative of the Agence French development (AFD).
This is a 25-year loan, the first installments of which will be paid in three years.
While the Caldonian public accounts and social accounts are in the red, and suffer from “structural deficits” as pointed out in a recent report by the Territorial Chamber of Accounts, this envelope will make it possible to balance the 2022 budget of the community. .
The bulk of the funds will be devoted to partially offsetting the deficits of social schemes, an economic recovery plan, including investments in electricity production, and also to financing expenditure linked to the Covid crisis, the government said. .
“New Caledonia no longer has any borrowing capacity, because (…) its debt ratio is excessive. The debt/revenue ratio was 35% in 2012, it is now 255%” , said Mr. Faure, insisting on “the essential reforms” to lead.
In 2020, when granting a first loan of 28.6 billion CFP (240 million euros), New Caledonia had made a number of commitments to clean up its finances and reduce its expenses, but it did not had not held.
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This time, a monitoring committee will oversee their implementation and disbursements will only be “agreed upon the signing of the minutes of this committee” so that New Caledonia is able to honor the repayment schedule, specified the representative of the State.
“When we come to help us, we must be able to make an effort, to do our part”, pledged Louis Mapou, an independentist, whose government, installed a year ago, has started a program of reforms taxes over three years.
The reduction of the level of indebtedness to 90%, the limitation to 1% of the evolution of the wage bill, or the creation of a tax on the capital gains on real estate on secondary residences and a micro-tax on transactions financial measures are among the measures listed in the loan agreement.