“Deficit reduction should not be a cause for concern as long as the crisis persists,” assured the International Monetary Fund (IMF) in 2020, in the midst of the global Covid-19 pandemic. Two years later, while the war in Ukraine has slowed the recovery, caused energy prices to explode and widened the deficits even further, the international organization based in Washington adopts a much less complacent discourse, in particular vis-à-vis vis-à-vis France. In its annual report devoted to France, published Monday, November 21, the IMF sends it a thinly veiled warning, calling on it to accelerate the pace of reduction in its public spending and urging it to reserve its measures of support in the face of the energy crisis.
“We supported ‘whatever it takes’, but it’s time” to put an end to it, said Jeffrey Franks, IMF mission chief for France, at a press conference, presenting the conclusions of the mission which, each year, reviews the economic, budgetary and finance of France, as provided for in article IV of the statutes of the international organization.
The message sounds like a call to order, as the executive prepares to release an additional fifty billion euros to support households and businesses indiscriminately in 2023, as part of the budget under review. in Parliament, and while the rates go up.
It also contrasts with the recommendations addressed to Germany in July. The IMF then judged the country’s budgetary orientation for 2022 “appropriate”and even urged Berlin “to overcome long-standing obstacles to rapidly and decisively increasing public investment. » Germany has since announced a 200 billion euro package to help households and businesses facing rising energy prices.
France has not, in fact, approached the energy crisis with finances in the same state as those of its neighbour. It has nonetheless mobilized considerable sums (more than 100 billion euros since the fall of 2021, in total) to absorb most of the increase for households. This has enabled it to contain the evolution of inflation at a level lower than that of other European countries, admits the IMF. But at the cost of a massive increase in spending, on top of the hundreds of billions already disbursed to support the economy penalized by Covid-19, and fueling a new “whatever the cost”.
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