“We are not going to have a fiscal shock every year, we will have to go further” in spending savings, argues Pierre Moscovici

The first president of the Court of Auditors was the guest of “8h30 franceinfo” on Friday.

“Without a doubt”the 2025 budget is a strict budget, but “rigor is not a fault, it is a virtue“, underlined, Friday October 11, on franceinfo the first president of the Court of Auditors, Pierre Moscovici, the day after the presentation of the draft budget for 2025. On the other hand, he “don’t believe“whether it is an austerity budget.”There is no austerity, there is a readjustment, particularly in relation to public spending, but also in terms of taxation“, commented Pierre Moscovici.

“When we start to adjust expenses and when we make a certain number of tax measures, we are in a more rigorous management“, he underlined. He then estimated that “macro-economically, it is not an austerity budget, which does not mean that all the choices made were relevant and that is up to the deputies or senators at the national representation to debate it with the government“.

“We still have a public expenditure which is quite substantial“, he insisted, noting that even with this draft budget, “we still have 56.3% of public spending in gross domestic product (GDP): this is 9% more than the euro zone average“.

“You have to know where you’re starting from“, argued the one who is also president of the High Council of Public Finances (HCFP), recalling the brutal revisions of the deficit forecast for 2024. “A year ago, we voted on the finance project for 2024, with a planned deficit of 4.4% of GDP and at the end of 2024, we will have 6.1%“, he insisted. “This means that during this year, 52 billion additional deficits accumulated, he pointed out. When we have that, we have to react“.

“For the last years 2023 and 2024, we have had very significant slippages, too significant. Which means that there were forecast errors“, he regretted. The draft budget presented Thursday to the Council of Ministers is, according to him, “necessary because France is today far too indebted“. Recalling that France is under European Union procedure for excessive deficit, Pierre Moscovici warned that this is “a question of credibility for France, our credibility is at stake, it is scrutinized“.”Our debt must be financed and if we are not credible, this rate (of borrowing from France) will increase.“, he developed, insisting on the fact that the objective of “5% deficit (for 2025) must be held“.

If this finance bill marks a return “to reason“, the president of the High Council however sees “areas of vulnerability or fragility“.”The growth forecast of 1.1% in 2025 seems a little high to us“, he considered, in reason”of the significant budgetary adjustment” carried by the government which should not be without effect on the country’s economy.

According to Pierre Moscovici, savings in public spending and tax increases will take away from growth.0.4 or 0.5 points of GDP“. So “pTo have 1.1% growth, we should have had fairly high spontaneous growth, which the figures do not say“, he decided. Another point on which the senior official warned: “we are reasoning about a 5% deficit in 2025, when in reality, the document we said is 5.2%“.”Which means that we postulate that, during the parliamentary debate, there will still be 5 billion euros, or 0.2 points of GDP, which will be adopted by amendment“, he explained. “This requires great wisdom on the part of parliamentarians and great strength of conviction on the part of the government.“, he warned.

Finally, another point of concern for the first president of the Court of Auditors, “le weight of taxation” in this 2025 draft budget. Contrary to what the executive asserts, which maintains that of the 60 billion euros of efforts, two thirds, 40 billion, come from economies and a third, 20 billion, comes tax increases, the High Council makes a “different reading” : “The tax effort is very significant. For us it is of the order of 30 billion euros and represents at least half of the effort asked of the French“.”For this first year, the burden of taxation is significant, for the following years, we will not be able to start againr,” he argued. “We are not going to have a fiscal shock every year, we will have to go further” in cost savings, he argued.