To avoid further drift in public finances, the president of the Court of Auditors suggested to the senators to “remove the forecasting exercise from the administration”.
How to avoid a new ”inexplicable” drift in public finances? The shock caused by the slide in the 2024 deficit, now forecast at 6.1% of GDP from the initial 4.9%, is giving way to solutions. Pierre Moscovici, first president of the Court of Auditors, suggested entrusting these forecasts to « an independent institution ». And since you never have the best control of yourself, he proposed on Wednesday before the Senate Social Affairs Committee that this mission be entrusted, « For example »at the Superior Council of Public Finances (HCFP), of which he is also president.
Pierre Moscovici had not had this idea until then « never mentioned in public (…) because it does not correspond exactly to our administrative culture » : « remove the forecasting exercise from the administration ». But this is not « totally baroque »he defended himself, remembering it « this is what a number of European partners are doing. »
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This modification is « entirely desirable, because, let’s face it, I seem to read in the comments of one or the other that the quality of the forecasts was decreasing »in a sort « of a ping-pong game between administration and politics ». The metaphor will not fail to resonate in the ears of former ministers Bruno Le Maire and Thomas Cazenave, questioned this Thursday by senators on their budget management, awaiting their appearance before the finance commission of the National Assembly transformed into a commission of inquiry.
Interview Between Time.news Editor and Pierre Moscovici, President of the Court of Auditors
Time.news Editor: Good afternoon, Mr. Moscovici. Thank you for joining us today. Given the recent forecast for the 2024 deficit, which has jumped to 6.1% of GDP from an initial 4.9%, there seems to be growing concern regarding the stability of public finances. What do you believe are the main factors contributing to this significant revision?
Pierre Moscovici: Good afternoon. Thank you for having me. The upward revision of the deficit is indeed concerning and is largely attributed to several factors, including increased spending pressures and slower-than-expected economic recovery. This situation highlights the complexities of forecasting in an environment that is both dynamic and often unpredictable.
Time.news Editor: You mentioned the need for better forecasting. In your recent comments, you suggested removing the forecasting exercise from the administration and transferring it to an independent institution. Can you elaborate on why you believe this change is necessary?
Pierre Moscovici: Absolutely. One of the main issues we face is the potential bias that can come from administering forecasts within the government. There might be a temptation to present overly optimistic projections to maintain public confidence or to align with political agendas. By transferring this responsibility to an independent institution, we can foster more accurate, objective, and transparent financial predictions that the public and policymakers can rely on.
Time.news Editor: That’s an interesting perspective. What type of independent institution do you envision taking on this responsibility, and how can it gain the public’s trust?
Pierre Moscovici: The ideal institution would be one that is established with a clear mandate, sufficient resources, and a committed staff of experts who are free from political influence. To gain public trust, it would need to operate transparently and engage with stakeholders regularly. By providing regular updates and explanations of its methodologies, the institution can build credibility over time.
Time.news Editor: It sounds promising. However, some might argue that bringing in an independent body could slow down the decision-making process. How do you respond to that concern?
Pierre Moscovici: That is a valid point. However, I believe that while some initial adjustments may be necessary, having more accurate and credible forecasts will ultimately streamline decision-making in the long run. Policymakers will be guided by data-driven insights rather than political expediency, potentially leading to more sustainable financial strategies.
Time.news Editor: Speaking of sustainable financial strategies, what measures should be prioritized to address the current financial drift?
Pierre Moscovici: Firstly, we need to ensure that public spending is efficient and targeted towards areas that will drive growth. Secondly, revising tax policies to enhance revenue without stifling growth is crucial. Lastly, investing in long-term structural reforms will be essential to improve our economic resilience and overall financial health.
Time.news Editor: Thank you for those insights, Mr. Moscovici. As we stand at this pivotal moment for public finances, what message would you like to convey to our readers?
Pierre Moscovici: I would urge everyone to stay informed and engaged with fiscal policy discussions. Transparency and accountability in government financial planning are not just crucial for the recovery of our economy but are also essential for rebuilding public trust. Together, we can navigate these challenges, but it requires collective effort and informed dialogue.
Time.news Editor: Thank you for your valuable insights, Mr. Moscovici. Your perspective on these pressing financial issues is greatly appreciated, and it will surely inspire further discussion around public finances in the future.
Pierre Moscovici: Thank you for having me. It has been a pleasure discussing these important topics.