The High Council of Public Finances deplores the “lack of credibility” and “coherence” of the federal government’s monetary trajectory | EUROtoday

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In an opinion made public on Wednesday April 17, the High Council of Public Finances (HCFP) could be very important of the steadiness program for the interval 2024 to 2027 introduced by the federal government, the place it units out its monetary trajectory and its forecasts. of development. If it goals to return under 3% of gross home product (GDP) in 2027, this monetary trajectory lacks “credibility” and of ” consistency “estimates the general public physique.

This new stability program, introduced Wednesday morning to the Council of Ministers and which should be despatched to the European Commission within the coming weeks, offers for a discount within the deficit to five.1% in 2024, 4.1% in 2025, 3.6 % in 2026 and eventually 2.9% in 2027. The government has already introduced funds cuts of 10 billion euros in February and its intention to save lots of the identical quantity once more within the coming weeks. Then, in 2025, the federal government desires to seek out 20 billion in financial savings, in comparison with 12 initially.

However, for the HCFP, “taking into account the degradation” shock of the 2023 public deficit at 5.5% of GDP, as an alternative of 4.9% initially deliberate and“lower growth assumptions” – 1%, in comparison with 1.4% initially deliberate for 2024 – a return under 3% by 2027 “would require a massive structural adjustment between 2023 and 2027” Who “would be essentially based on an effort to save costs”.

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“The High Council considers that this forecast lacks credibility”each as a result of the documentation of this effort “never done in the past” keep “at this incomplete stage”but additionally as a result of “its achievement requires the establishment of rigorous governance, involving all the stakeholders concerned (the State, local authorities and Social Security), which is not present today”units out the opinion.

A debate and not using a vote within the Assembly on the finish of April

Regarding the criticism on “lack of consistency” of this trajectory, the group estimates that it “will necessarily weigh, at least in the short term, on economic activity”in order that “the government’s high growth forecasts” seem “not very consistent with the extent of this adjustment”.

Read the editorial of “Le Monde” | Public funds: the technique of avoidance

For 2024, the HCFP judges that the federal government's development forecast, revised downwards in February to 1%, in comparison with 1.4% beforehand, “remain optimistic”, “even if it is not out of reach”. But, general, “the GDP trajectory” retained in authorities forecasts for the interval 2024 to 2027 “is overvalued”estimates the HCFP. “There is therefore a significant risk that the government's assessment of potential GDP will subsequently be revised downwards, and therefore that the structural share of the deficit will be revised upwards”he warns.

In phrases of type, the High Council additionally criticizes the referral ” late “ And ” incomplete “ of the federal government, which “does not shed light on the choices made while France's public finances present a worrying situation”.

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Tensions

At the top of the council of ministers, Wednesday at noon, the federal government spokesperson, Prisca Thevenot, defended a stability program which “recalls our anchors: reindustrialize, continue to invest in our public services, obviously move towards the objective of full employment to continue to carry out structural reforms that the country needs for the daily lives of our fellow citizens.” During this council, Emmanuel Macron “kept to remind us that it was obviously important and essential that we continue to maintain our course, to stick to our agenda to continue to act for a fairer France, a stronger France”she added.

Budgetary difficulties have triggered tensions in latest weeks inside the presidential camp, notably between the pinnacle of state and his minister of the economic system for seven years, Bruno Le Maire. While the latter pleaded for the introduced financial savings to be included in a corrective finance invoice, which might be introduced to Parliament, the President of the Republic brushed apart this speculation.

Weakened by the absence of an absolute majority within the National Assembly, the Prime Minister, Gabriel Attal, ought to have resorted to article 49 paragraph 3 of the Constitution to have this textual content adopted and not using a vote – as is nearly systematically the case. case throughout this legislature on budgetary texts. The use of this constitutional software may then have allowed the oppositions to desk a movement of censure in opposition to the Prime Minister and his authorities. A risk that has been looming for a number of weeks from the Les Républicains group within the Assembly. The deputies must be content material with a debate and not using a vote on public funds scheduled for April 29 within the Assembly.

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The World with AFP

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