France is no longer able to postpone the sight of the belt because the payment of snowball debt is getting higher in the coming years, the independent public audit office said on Thursday.
French public finances are spinning outside of last year’s control when the political crisis made four governments in succession in a large largest, unable to overcome an unexpected decline in tax income and soaring expenditure for the second year in a row.
“We can no longer repeat the same mistakes, and always postpone efforts to control public finances are no longer an option,” Head of the Audit Office Pierre Moscovici told reporters. “If we don’t do it, we will be forced to do it.”
After weeks of postponement, the latest French Prime Minister, Veteran Centris Francois Bayrou, passed the 2025 budget only last week, using special constitutional power to cut the Low Parliament Assembly which was divided, where no party almost held the majority of working.
The 2025 budget aims to cut the public sector deficit to 5.4% of the output from 6% in 2024 through a combination of savings and tax increases, but will still leave France with one of the largest fiscal deficiencies in the European Union.
“Restoring the credibility of French financial has become an absolute emergency to avoid increasing uncontrolled debt payments,” said the Audit Office in an annual report on public accounts.
That makes it more vital to remain on the target deficit this year as the first step towards bringing fiscal deficiencies in line with the EU limit of 3% of the output in 2029, he said, warned that debt payments were up 3.2% of GDP at that time.
But the plan for deduction of expenditure is a lack of details so far although France needs to slice 110 billion euros from annual expenditure in 2029 to meet the target, the audit office said.
Unlike other major European countries, France will not be able to reduce its debt burden to the pre-Pandemic level at the end of this decade.
Source: Reuters
