In leaving the Ministry of Economy, Bruno Le Maire tried to absolve himself of responsibility for the increase in the public deficit, which is expected to reach 5.6% of GDP by the end of 2024. He blamed local authorities for financial mismanagement, stating without serious data that their expenses could increase by 16 billion in 2024. This discredits local management and holds them responsible for deepening the public deficit.
To put into perspective the actual contribution of local authorities to public spending, in 2023, public spending was divided among three actors: 43% for social security administrations (public hospitals, general and special schemes), 39% for the State, and 18% for local public administrations. In 2023, local authorities generated a deficit of 5.3 billion euros to finance their public spending, compared to the State’s deficit of 156.4 billion euros. Between 2022 and 2023, the State’s deficit alone increased by 7.3 billion euros, which is higher than the total deficit of all local authorities.
In terms of debt in 2023, the State’s debt accounted for 91.7% of GDP, while local government debt was at 8.9% of GDP. Out of the total public debt of 3,101 billion euros in 2023, local government debt was around 250 billion euros and the State’s debt was 2,513 billion euros. The difference arises from the fact that local authorities are required to balance their operating budget under the golden rule, while the State’s debt can fund both operating and investment expenses.
The importance of public procurement is significant for both local authorities and the State, with occasional concerns raised about the insufficient evaluation of public policies by local authorities. It is important for all entities to exercise budgetary vigilance and ensure the relevance of their expenses. Discrediting the functioning of local authorities, assuming poor management, or generalizing isolated errors is regrettable. It is worth noting that local authorities had a higher deficit before decentralization in 1982, when they were under the control of the State and had fewer competencies, yet their deficit was higher at over 1% of GDP compared to 0.35% in 2023.
Overall, the responsibility for the public deficit cannot be solely attributed to local authorities, as the State’s deficit plays a significant role. It is essential to avoid casting doubt on the effectiveness of local governance and to recognize the progress made in managing public finances compared to previous years. By understanding the distribution of public spending among different actors and the rules that govern their debt management, a more balanced assessment of financial responsibility can be achieved.
