In its annual report published in the middle of the presidential campaign, the Court of Auditors alerts, Wednesday, February 16, on the need for a “unprecedented effort” in the coming years to control public spending and straighten out France’s accounts, which have been damaged by the health crisis.
This crisis has led to the mobilization of public resources “on an unprecedented scale” to fight the epidemic and support the economy, and “This considerable effort will have a lasting impact on the deficit and the public debt, the reduction of which will require unprecedented efforts to control expenditure”warns the Court in its traditional annual report devoted entirely to the assessment of the management of the health crisis.
Public debt should thus increase by 560 billion euros between the end of 2019 and the end of 2022, thus weighing around 113% of GDP, the Covid-19 bill alone amounting to 140 billion euros at today, according to the Ministry of Finance.
France is like this “in the group of euro area countries where, two years after the start of the Covid-19 pandemic, the public finance situation is the most deteriorated”, strikes the Court, which is worried about this gap with our neighbors.
Its report points out that“despite a robust economic recovery”, with a 7% rebound in growth last year and another 4% expected this year by the government, “the public deficit should remain very high in 2021 (7% of GDP) and 2022 (5% of GDP)”.
Above all, with the end of exceptional emergency expenditure, this deficit “now has an exclusively structural character”.
The new expenditure planned within the framework of the “Ségur de la santé” (10 billion in permanent regime) or the reduction in production taxes (10 billion euros), decided within the framework of the recovery plan, are for example expenditure perennial.
In fact, the Court points to tax cuts “meaningful” still planned for 2022 (housing tax, production taxes, corporation tax, electricity tax, etc.), and the 1.1% increase in spending, excluding stimulus and support measures linked to the crisis.
In total, these are “nearly 9 billion euros of additional savings each year” which will have to be found, and which would make it possible to limit the increase in expenditure to +0.4% on average between 2023 and 2027. AAchieving such an objective will therefore require reforms, in priority to the pension system, health insurance, employment policy, social minima and housing policy, notes the Court.