Moscovici: 'France has an imperative: reduce deficit and debt, which are heavy burdens'
The former minister and former EU commissioner, now president of the French Court of Auditors: 'The country is certainly not at risk of default or the IMF, but we still need to regain control of public finances'.
by Morya Longo
4' min read
4' min read
"One does not comment on a vote before it has taken place. But certainly, if the Bayrou government does not gain confidence on Monday, France would enter uncertain ground. President Macron would have to open the process to find an alternative solution. I think that this can only come from the Socialists: either through their entry into the government, or through their external support. A compromise has to be found to approve the budget law'. Pierre Moscovici has very clear ideas: the priority in France is to pass the budget law, which puts the public accounts on the right track. President of the French Court of Auditors since June 2020, Moscovici was European Commissioner for Economic and Financial Affairs from 2014 to 2019, Minister of the Economy from 2012 to 2014 and Minister for European Affairs from 1997 to 2002. He knows French politics well. And, above all, he knows well the risks of excessive debt and deficit: France currently has the former at 113.9% of GDP and the latter at around 6%. We met him in Cernobbio, at the Ambrosetti Forum. He did not back down.
Finding the balance of the Budget Law is not easy: politics is divided, but civil society is also on the warpath. In addition to the 'block everything' demonstration, there is the strike planned for 18 September. Very complex situation.
France must make the effort to reduce the deficit. This is imperative, it is in our interest. The crisis is at once political, financial and social. But from a budgetary point of view, the way forward is clear: the deficit must be reduced. Debt is a burden, weighing on the country's ability to invest in innovation, in defence, in the future. No one could have imagined a few years ago that France would have a higher debt/GDP than Portugal, Spain and Belgium. No one could have predicted that our government bonds would have yields only 8 basis points lower than those of Italy. These figures prove only one thing: that the time has come to fix the public accounts.
How serious is the situation?
It is by no means catastrophic. France is certainly not in danger of default, nor of having to ask the Monetary Fund or Europe for help. But it is still necessary to regain control of public finances.
