the true causes for the explosion underneath Macron | EUROtoday

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Lhe debt has exploded… however who’s guilty? For its second day of listening to this Thursday, May 23, the parliamentary fee of inquiry into the expansion of the debt, launched by the Republicans and chaired by MP Philippe Juvin, tried to reply this query due to the clarifications offered by François Ecalle, public finance knowledgeable and president of the Fipeco affiliation, and the economist and professor at Pari-1 François Facchini.

First to go on the grill, François Ecalle engaged in a calculation train which had the benefit of elevating the controversy. According to his estimates, of the 911 billion enhance in debt between the tip of 2016 and the tip of 2023, the measures to extend and reduce public spending and obligatory deductions determined by the Macron authorities could be chargeable for 20 to 35% of progress. of our debt. The deterioration of the financial system linked to the Covid disaster could be chargeable for solely 0 to 10%, as a result of the rebound in progress over different years made it doable to compensate for the autumn. Finally, 50 to 70% of the rise in our debt might be defined by “the legacy of History”.

Lower taxes

“The increase of 1.7 points of GDP in the French deficit results entirely from the drop in public revenue as a percentage of GDP. Public spending as a percentage of GDP in 2023 is at the same level as in 2016,” defined François Ecalle. In different phrases, it’s the tax cuts which have widened our deficit. “It was desirable to reduce compulsory contributions, but it was first necessary to reduce expenditure and not put the cart before the horse,” continued the general public finance knowledgeable. An error which was not solely that of Macron in accordance with him, but in addition of earlier governments. According to François Ecalle, “instead of reducing spending or increasing revenues, we are preserving the purchasing power of households and the competitiveness of businesses, but we are postponing the problem until later.”

Tipping level recognized by François Ecalle, but in addition by François Facchini: the Yellow Vest motion. “One of the definitions of debt unsustainability is when a government cannot act either on spending, because politically it is impossible, or on taxes […] The government which cannot touch spending because it is blocked by a social compromise […] will increase its debt”, underlined the economist to decipher this vital second of Macron’s first five-year time period.

He highlights a particularity of the rise in debt since 2017: “What characterizes our period is not so much the upward trend in debt, it is post-crisis management. » Compared to 2008, the reduction in debt after the crisis was in fact less significant, even though the previous level of debt was higher.

READ ALSO And the debt, saperlipopette? Among the explanations put forward by the economist: the theory of “weak governments”. “Governments with a small majority rarely have the possibility of reducing spending,” underlined François Facchini. Next step for the fee: Tuesday May 28 with the listening to of Antoine Deruennes, director basic of Agence France Trésor (AFT).