French public debt now stands at 95% of GDP – BBC

GRAPHICS – The debt is equivalent to 95% of GDP but the Finance Minister Michel Sapin, promises that it “does not reach” 100% of GDP. Meanwhile, in 2014, the government deficit was less than expected, at 4%. Bercy now expects 3.8% for 2015.

The French debt continues to swell. According to preliminary results of the national government accounts published Thursday by INSEE, public debt reached 95% of GDP against 92.3% a year earlier. It rose by € 84.4 billion last year to reach a staggering 2.0378 trillion euros, or 30,727 euros per capita! This is a new record. The debt is actually just below the 95.2% retained in the final version of the Financial trajectory to last year. This morning, the Minister of Finance, Michel Sapin promised that the debt “will not reach” the level of 100% of GDP. “We will not reach that figure because we control our expenses and we manage our debt,” he has said on i-Tele.

This swelling debt is the direct consequence of the accumulation of deficits (which aggregate balances of government accounts, local government and social security funds). The last budget in balance for France dates back to 1974 …

Despite the tax increases, the government of François Hollande has not been able to drastically reduce the fiscal imbalance. According to INSEE, Bercy, however, able to achieve a deficit for 2014 lower than the latest forecast at 4% of GDP against 4.4%. INSEE said that this “slight reduction of the need for government funding” in 2014, with a public deficit in absolute value of 84.8 billion euros, was due “mainly” by a sharp decline in government investment local, which decreased by € 4.8 billion.

But this improvement is relative. The government has several times in recent months, revised down its forecasts. He was counting originally on a public deficit of 3.6% of GDP in 2014, a forecast raised to 3.8% and 4.4% in the spring to the fall when he seriously downgraded from 0 9% to 0.4%, its expectations for economic growth this year. In addition, the deficit to 4% reflects a lack of progress. By comparison, it accounted for 4.1% of national wealth late 2013.

“This is the result of an ongoing effort to control public spending”

The finance minister Michel Sapin said for his part in a press release that this better than expected deficit in 2014 was “the result of an ongoing effort shared by all jurisdictions, control of public spending. ” In detail, total public spending rose 1.6% in 2014, its rhythm “the lowest since 1998,” has insisted the Ministry of Finance. Public spending reached 57.2% of GDP last year against 57% in 2013. The tax burden as a percentage of GDP, is they remained perfectly stable at 44.7%.

These open “the prospect of a downward revision in the government deficit in 2015 to around 3.8% of GDP” against 4.1% expected so far. What can France do a little better than the path set by the European Commission. The latter requires the Hexagon 4% deficit this year. The government had already given to reduce this deficit below 3% of GDP by 2015. The European Union has validated this renunciation giving France a further period of two years, the third in the space of six years to get there.