2024-09-25 10:27:55
The governor of the Bank of France, François Villeroy de Galhau, proposed on Wednesday a “well-balanced cocktail” of reduced spending and “a decisive, fair tax increase” to deal with the dizzying deficit of the country.
“The French disease is that we have been accumulating too much deficit and too much debt for a long time, and this situation cannot continue any longer. The debt is becoming more and more expensive, the expenses we inherited from the past hinder us to finance the facilities. The finances of the future and the international lenders, who lend (money) to France, told us, we must respond,” the governor explained on France 2.
Since the appointment of the new government of Michel Barnier, “the political debate has raged, […] we tend to get angry, to argue about one of the reforms, which are some tax increases,” he added.
According to François Villeroy de Galhau, “we must ask the question in a simple way: when a family lives beyond its means and cannot make the expenses, and this is the case in France , we can reduce our expenses or we can increase our taxes.
“The common understanding is that today we must do both, we need a well-balanced cocktail of the two measures and it is not up to the Bank of France to decide, it is a democratic debate with the government and the Parliament. I believe that the share right is the majority of fiscal savings for about three quarters, and undoubtedly a return to a goal, fair tax increases, for a quarter.
On September 17, Mr. Villeroy de Galhau proposed “unparalleled efforts and thinking on large companies and large taxpayers” in order to reduce deficits.
On Wednesday, the governor of the Central Bank also suggested “looking at what works among our neighbors” because “soon we will be the only European country that cannot bring its debt below 3%” and “we are not stupid than us. European neighbors.
In the draft budget for 2025 that is planned to be presented in early October, the government will have to explain how it intends to restore France’s public finances.
In a note in July, the Treasury warned of the risk of a deficit of 5.6% of GDP in 2024 with unchanged policy, against the target of 5.1% set by the outgoing government, while France has been previously criticized by Brussels for excessive deficit.
By 2023, the public deficit is out of control, at 5.5% of GDP compared to the projected 4.9%.
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