Officially, the government has made the reduction of public spending one of its main priorities for 2023. But the Court of Auditors obviously has some doubts, to the point of offering its help.
The annual public report – which is due to be presented this Friday – thus points to “a public finance situation in 2023 among the worst in the euro zone” and highlights the need to quickly launch effective public expenditure reviews to finally find solutions. source of savings. “We are concerned about the recovery of public finances. It will necessarily go through reviews of public spending, and I will make proposals for the Court to contribute to it, ”explains Pierre Moscovici, the first president of the institution on rue Cambon.
The message to Macron
The former European Commissioner had the opportunity to pass the message to Emmanuel Macron, to whom he delivered the report on Thursday. The Head of State does not have the reputation of being a relentless budgetary rigor. But his Minister of the Economy Bruno Le Maire had promised in January to quickly launch a public finance meeting and a review of expenditure to identify sources of savings with the ministers concerned. The ace ! The social news around pensions has relegated this project to the background, left in the sole hands of budgetary experts from Bercy.
“The Public Expenditure Review is about getting everyone on board. Its first objective is to have a better quality of public spending. If it’s a purely budgetary exercise, it doesn’t work”, warns Pierre Moscovici. This should outline 7 possible avenues (on education, health, housing, etc.) in the coming weeks.
The “whatever it takes” endures
There is clearly an urgent need to act, according to the Court’s report. The end of “whatever the cost”, repeatedly announced by the government, is struggling to appear clearly. The Court has again identified 37.5 billion euros in expenditure linked to the health crisis and the recovery plan in 2022 – “it is a draft exit from ‘whatever the cost'”, judge Pierre Moscovici – and still 12.5 billion in 2023. To which must be added the measures taken subsequently to cushion the inflationary shock – particularly in energy – which represented 25 billion in 2022 and 36.3 billion in 2023.
Even setting aside these exceptional elements, the increase in public spending is 3.5% in volume (excluding inflation) in 2022 and 0.7% in 2023. That is, for this year, a level which remains higher than that recommended by the government in its budgetary roadmap to reduce the deficit to 3% of GDP in 2027.
This trajectory was included in the public finance programming law (LPFP) proposed in September, but which ultimately did not find a majority in the National Assembly. This is enough to worry Pierre Moscovici who judges that it “is essential that our country adopts a programming law”.
Dunce cap on debt
The first president of the Court of Auditors takes care, however, to add that this law will have to be “more realistic in its assumptions and more ambitious in its objectives”. The outlook for growth and interest rates has deteriorated in recent months compared to what the LPFP forecast. Other expenses have been announced, such as the increase in the defense budget wanted by Emmanuel Macron, evaluated “as an increase of almost 30%” by the financial magistrates.
This also darkens the picture for the outlook for public debt, expected at 111.2% of GDP in 2023. “France is not bankrupt. But we have a debt which is becoming very problematic, which could paralyze public action ”, with a debt load increasing to the point of cutting back all the budgetary room for maneuver, points out Pierre Moscovici.
Above all, it warns against the risk of fragmentation of the euro zone. “In 2027, we could find ourselves in a situation where France would be in the top three for debt, alongside Italy and Greece. This is not our place”, pleads the former European commissioner.