This persistent imbalance makes the debt ever heavier for the State, alerts the Court of Auditors, which notes “sprains to budgetary principles” last year.
The health crisis does not explain everything. In its annual report on the State budget (RBDE), the Court of Auditors looked at public spending during the year 2021. And it draws up a severe observation: even if the uncertainties linked to the crisis health have led to an extension of certain public aid schemes, covid-19 is not the only one responsible for the inflation of State expenditure.
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These are up sharply, to 426.7 billion euros in 2021, i.e. 37.1 billion more than in 2020, at the height of the health crisis. However, the year 2020 had already marked a very strong increase in public spending, with 53.6 billion euros more spent than the previous year.
This new increase in spending during 2021 is linked to the implementation of the recovery plan (19.6 billion), the cost of the inflation compensation put in place urgently by the government (3.3 billion ), or even the increase in the weight of debt interest (2.0 billion).
Expenses are increasing, and are not necessarily scrutinized closely enough, according to the magistrates of the Court. In an analysis note devoted to the Recovery plan mission, the Court of Auditors had already criticized this plan envisaged by the government, and for a total amount of 100 billion euros. Its implementation has been deemed “complex“and its overall logic”lacking in consistency“. Moreover, last March, the president of the Court of Auditors Pierre Moscovici had called for “a certain vigilance in the pursuit of the implementation of the recovery plan, to prevent it from contributing to accentuate them”.
A growing debt
The State can at least count on an increase in its revenues, thanks to the economic recovery. This does not make it possible to bring the accounts to balance, since the receipts only cover 60% of the expenditure. But they increased by 38.2 billion euros, for a total of 255.2 billion. And this, in particular thanks to the growth of tax revenues.
“Beyond the strong uncertainties related to the current geopolitical context and its economic and budgetary consequences, the review of 2021 management leads to highlighting several significant risks on the trajectory of expenditure for the years to come.“, Estimates the Court in a press release. She mentions in particular the future increase in the interest charge on the debt due to inflation, and “outstanding balances (expenses incurred to be paid over the next few years) up sharply“. Because the state debt stood at the end of 2021 at 2145 billion euros, up 144 billion euros over one year. The debt burden has also increased, which greatly weakens the State in a context of rising interest rates. “The high level of government debt makes the interest burden very sensitive to a rise in rates“, thus warned the Court of Auditors.
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The Court of Auditors also examines “deviations from budgetary principlesover the past year. The government in fact carried over credits at the end of the year which weremuch higher than those usually observed“. An attack on theprinciple of annual budget“which according to the Court weakens the voice of Parliament on spending and harms”the readability of finance laws“. To this criticism, the Ministry of the Economy responds by highlighting the context of uncertainty of the health crisis.