Paris (AFP) – France’s public debt has exceeded for the first time the symbolic EUR 2,000 billion at the end of the second quarter, and has doubled in ten years, even blackening the table for the government on the eve of the budget in 2015.
The amounts owed by the state, social security and local authorities have thus reached a new record at the end of June, to 2,023.7 billion euros, said Tuesday the National Institute of Statistics and Economic Studies
This amount has almost doubled in 10 years. late June 2004, the gross national debt was $ 1,081.6 billion euros.
In the second quarter alone, the gross public debt, as measured by the criteria of the Maastricht Treaty, it further increased by EUR 28.7 billion. An increase attributed to the state, whose contribution to the debt increased by EUR 35.2 billion, while that of Social Security funds decreased by $ 3.9 billion and that of local government, 1, 6 billion.
After the publication of INSEE, the Government recalled having largely inherited this growing debt. The Finance Ministry stresses that debt had doubled between 2002 and 2012 from 930 to 1.860 billion euros, 600 billion between 2007 and 2012 (ie, during the presidency of Nicolas Sarkozy.)
The curve of the French public debt shows a sharp acceleration from the end of 2007 due to financial and economic crisis. “Every time we lose a percentage point of GDP, the state loses 10 billion (…) in taxes, social contributions,” recalls Henry Sterdyniak economist at OFCE.
this regard, “there is no French specificity”, he points out, if the debt-gross domestic product (GDP) ratio has jumped by about 30 points in France during the crisis, the rise was 50 points in the UK, and some 60 points in Spain
-. crisis does not explain everything –
But the economist also points out that France has entered the crisis with already relatively high fiscal imbalance, because of the stimulus policies of the Jospin government and tax cuts at the beginning of the quinquennium Sarkozy: “The crisis has exacerbated a phenomenon that already existed”
. reported to national income, public debt reached 95.1% of GDP at the end of the second quarter, 1.1 percentage point higher than the previous quarter. Germany she had dug his debt less strongly during the crisis (less than 20 percentage points of GDP), has already begun to reduce it, reducing it to 78.4% in late December against 81% in 2012.
In its latest forecast, the government expected a public debt to 95.1% of GDP only at the end of the year, and a decline from 2016, but these estimates have not been update after lowering growth estimates and raising those on the deficit, on September 10.
In a context of sluggish growth and extremely low inflation, Bercy a general government deficit 4.4% of GDP this year from 4.2% in 2013, and the 2015 budget, which will be presented Wednesday, would confirm only a slight decline of 4.3%. A deficit that the country must finance by borrowing, and therefore is more debt.
“The policy of (the current) government, which is based both on a fiscal consolidation with savings program and growth strategy with the CICE (Tax credit for competitiveness and employment, Ed) and the Covenant of responsibility, should help stop the growth of debt, “says Bercy.
But in the short term, with a numerator (gross debt) that progresses and a denominator (economic output) stagnating, the debt / GDP ratio will continue to rise mechanically.
Some economists believe even now inevitable happens 100% in 2016 and 2017, a level already achieved or exceeded by several European countries, including Greece, Cyprus and Portugal as well as Ireland, Italy and Belgium.
In this gloomy picture, a reason to rejoice, however: France still borrows at very low levels – about 1.35% for 10-year rate, which refers – which allows avoid that interest could still weigh more order.
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