Some find humor in the situation. French public debt reached a staggering €3.228 trillion at the end of June, according to the figures unveiled by the French National Institute of Statistics and Economic Studies on Friday, September 27. The figure has earned former finance minister Bruno Le Maire a place in the running for the Press Club’s “most laughing little phrase of the year” award, albeit unintentionally. “If we have a high level of debt today, it’s because I saved the French economy,” said Le Maire on BFM-TV on June 1, defending his record.
Four months later, Le Maire’s statement may indeed seem outdated. The French economy has certainly overcome the shock of Covid-19, showing slight growth and low unemployment despite Germany’s recession, the cost of this recovery is alarmingly high. The “whatever it takes” policy, involving extensive public spending that enabled France to avoid a deep crisis, continued past the pandemic and led the country into massive debt. This debt has become more than a problem, it has become a threat. Not only is it staining public finances increasingly more, but it’s not out of the question that it could lead the country into a spiral of financial difficulties, as rising interest rates hint at deeper challenges ahead.
Read more Subscribers only French debt crisis puts renewed pressure on interest rates
“Mr. 1,000 trillion” is how Le Maire was dubbed by his opponents before he left the government. In fact, France’s public debt, calculated according to Maastricht Treaty criteria, rose from €2.281 trillion to over €3.200 trillion in the seven years from 2017 to 2024, the period during which the former minister headed the Economy and Finance Ministry. It increased by a further €68.9 billion in the second quarter of 2024, following a €58.3 billion rise in the previous quarter.
France’s public debt has risen to 112% of GDP after three years of decline, reversing its previous trend since the start of the year. This level is far above the European Union’s requirement for member states to maintain public debt below 60% of GDP. While 12 of the 27 member states of the EU do not meet this criterion, France is particularly concerning given that it often promises to get its act together but never succeeds. In the EU, only Greece and Italy have a higher debt-to-GDP ratio.
Interests that weigh heavily
Le Maire is not the only one responsible. “This debt is the combined result of 50 years of public deficit,” stressed his successor, Antoine Armand, on September 25, before members of the Finance Committee. For half a century, the government has been unable to balance its budget, ending the year in the red and needing to borrow money to cover shortfalls. Social security and local authority deficits also contribute to the burden. By the end of June, the government accounted for 83% of total public debt, compared with 9% for social security and 8% for local authorities.
You have 44.1% of this article left to read. The rest is for subscribers only.
Source link : http://www.bing.com/news/apiclick.aspx?ref=FexRss&aid=&tid=66f7f868e0e646379d87fcb5a7b33c38&url=https%3A%2F%2Fwww.lemonde.fr%2Fen%2Feconomy%2Farticle%2F2024%2F09%2F28%2Ffrench-public-debt-hits-new-high_6727571_19.html&c=10021908791345475876&mkt=de-de
Author :
Publish date : 2024-09-28 02:57:00
Copyright for syndicated content belongs to the linked Source.
