The structural deficit of France still at the top in 2020

The president of the Republic said that the rule of 3% deficit

Figaro

public relative to national wealth was a "debate for another century." It must be said that the government has not emerged with the structural deficit of France. In 2020, it will exceed even the 50 billion euros. Then, the government explained that the deficit of France to 2.2% is a great success because it is not reached for several years except that it does not say that a large part of the decrease in the deficit comes from the fall of the burden of the debt related to the low rates.

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It does not focus on the fact that the structural deficit of France is very high - one of the highest in the euro - zone, and strays dangerously from the expected path at the beginning of the quinquennium in the law on the programming of public finances. In this law, the structural deficit was projected at 1.6% in 2020. The High council of public finances has also sounded the alarm by attracting the attention of the government and the Parliament on the fact that France borders on the corrective part, that is to say, could re-enter an excessive deficit procedure to which it is not output in 2018.

A deficit that will worsen

In fact, excluding the taking into account of the business cycle, the structural balance will not improve between 2019 and 2020, remaining stuck at 2.2 per cent of GDP and aligned for the first time in 2020 at the level of the actual deficit. The adjustment in the structural balance would be zero. The State will see its deficit worsen (up from 3.5% of GDP, -84,5 billion euros, to -4% of GDP, -99,7 billion euros in national accounting).

To mitigate the deficits of the State, the government is counting on a surplus of € 5.8 billion (up 3.7 billion compared to the previous year) at the level of local communities. This is more than uncertain, because already, in 2019, the investment expenditure of the communities have been under-evaluated by the government, as pointed out by the High council in its opinion on the amended finance act for 2019.

see also : Rule of 3% deficit: why Emmanuel Macron has changed his mind.

On the field of government Security, the balance would also be a considerable surplus, particularly under excess techniques of the Fund amortisation of the social debt (Cades), even if for the first time the reform of the Unédic (in charge of the management of unemployment insurance) would generate 0.4 billion surplus, while $ 3.6 billion more would come from the supplemental plans. However, the pensions would have losses to $ 4.4 billion. As to health Insurance, it would be in a deficit of 3 billion, and certainly more with the ads that are preparing on the Hospital.

- control its public deficit, the government plays on a thread. With a balance of workforce and structural at the same level to 2.2 per cent of GDP, and an adjustment of public finances no, it does not comply with the efforts on minimum expected by Brussels in the framework of the preventive arm of the stability pact (0.1 percentage point of structural effort compared to 0.6 as a minimum). There is even reason to believe that this 2.2% of deficit will be difficult to hold.

Anticipating a possible downturn

The temptation is obviously strong, at the government level, to break the thermometer in dézinguant the 3% and the concept of structural deficit. The deal is too good to continue to maintain a deficit is very high while borrowing very low. But breaking the thermometer instead of conducting the structural reforms is not the solution. The interest of the measure of the structural deficit is precisely to anticipate a potential downturn in sanitizer at the maximum public finances in a period of growth. To go against is like going against the golden rule of balance of public accounts.