Rment in the history of European construction, the Franco-German couple appeared so dissonant on a budgetary level. While the French parliament is locked in a political crisis over its painful attempt to spend less in the 2025 budget, Germany’s governing coalition is torn over the question of whether it needs to spend more. Paris is strangled by its debt, Berlin by its thrift. Their only point in common: the two countries must change course to get out of the doldrums.
In France, awareness of the need for change still remains in limbo. The debate boils down to discussing the severity of finding ourselves without a government and without a budget at Christmas.The worst is not certain,but,from the left to the far right,the temptation of emptiness seems irresistible,without knowing what this irresponsible upheaval will led to.
reflection on the essential overhaul of the financing of our social and fiscal system, which would allow us to regain control of our public finances, is at a standstill. The “common base” dramatizes. Oppositions put things into viewpoint. The contry is paralyzed. The financial markets are in tension.
In germany, things are calming down. The German model has lost its luster.Growth is at a standstill and the sector’s social plans are multiplying. The gravity of the situation pushes the Germans to question the interrogation “Debt brake”the debt brake, totem of the rigor of the country’s public finances. Enshrined in the Constitution by angela merkel in 2009,this provision limits the structural budget deficit to 0.35% of gross domestic product. France is accelerating to over 6% in 2024.
The burden of the debt brake
As long as “Deutschland Ag” was reaping the dividends of globalization, this brake was virtuous, preventing export earnings from being squandered on uncontrolled spending. But in a few years the strengths of good European students have become existential weaknesses. The industry no longer has access to the Russian gas that allowed it to have competitive production costs. Rising trade tensions and slowing international trade are jeopardizing trade surpluses. china, which has long been the El Dorado of “Made in Germany”, has closed its technological gap and is abandoning German products, especially the most emblematic ones such as cars.