The current focus of fear and alarm is centered around the issue of national debt. This concern has overshadowed other pressing issues such as climate change, unemployment, and insecurity. The fear is that the growing debt burden of the state will be passed on to future generations, impacting their financial stability. This topic is important to be addressed in the upcoming European elections as it reflects a political choice between maintaining a social welfare state and embracing liberal economic policies that prioritize privatization and reducing public services.
France’s public debt is projected to reach 3,101.2 billion euros, or 110.6% of the GDP, by 2023, with a public deficit of 5.5%, or 154 billion euros. The government aims to reduce this deficit to 3% by 2027 through budget cuts of 10 to 20 billion euros in 2024 and 2025, without considering any changes to revenue. The increase in deficit since 2008 can be attributed to tax reductions implemented by the government, such as lowering capital gains taxes and corporate tax rates. Despite these targeted tax cuts, the overall tax burden on individuals has increased slightly, while corporate taxes have decreased, shifting the tax burden between different economic agents.
Under President Macron’s administration, average annual revenue growth has been 2.8% between 2017 and 2023, while expenses have increased by 3.7%. This modest increase in expenses, given the inflationary context, also includes exceptional spending of 241 billion euros between 2020 and 2023, related to emergency measures during the COVID-19 pandemic and the energy crisis. However, the government’s approach to addressing the rising debt has raised concerns about the distribution of fiscal efforts between different sectors of the economy, particularly the shift towards increased taxation on households rather than on businesses.
The ongoing debate surrounding public debt in France highlights the ideological battle between social democracy, which advocates for a strong welfare state, and liberal economic policies that prioritize privatization and reduced government intervention. The concern over the growing debt burden is a key issue in the upcoming European elections, as it reflects broader political choices regarding economic governance and social welfare. The government’s current strategy to reduce the deficit through budget cuts without addressing revenue adjustments raises questions about the sustainability of the current fiscal policy and the long-term impact on future generations.
Ultimately, the focus on public debt in France reflects broader global trends in economic governance and the prioritization of fiscal austerity measures over social welfare programs. The current discussion around debt levels, deficit reduction, and fiscal responsibility will continue to shape political debates and policy decisions in France and across Europe. The implications of these decisions extend beyond current economic challenges, impacting future generations and the overall socio-economic stability of the country. The ongoing debate underscores the importance of balancing fiscal prudence with social welfare considerations in determining the future direction of economic policy in France.
