In her book “Le Déni de la dette”, Laure Quennouëlle-Corre, a historian and research director at CNRS, explores the unique relationship between the French people and their state when it comes to finances. She discusses the constant increase in public debt and the underlying consensus on this issue. The recent announcement by the National Institute of Statistics and Economic Studies that France’s public debt is expected to exceed 3 trillion euros in 2023 has sparked discussions on the topic once again. However, the issue of public debt is usually only briefly addressed in French political debates, resurfacing during significant events such as the Maastricht Treaty in 1992 or presidential campaigns.
Despite the recurring discussions on public debt, it has never been a central issue in political agendas or electoral campaigns in France. The recent alert from the Court of Audit about the increasing debt levels may have caused concern among policymakers and financial markets, but the broader public discourse remains limited. While France has not balanced its budget since 1975 and other developed countries also have comparable debt levels, there are concerns about the country’s ability to address pressing issues like the transition to renewable energy, national security, and new technologies given its limited fiscal space due to past deficits.
The accumulated debt and the constraints of the eurozone, which prevents devaluation as a tool to manage economic challenges, have made France’s public debt a structural issue. This poses a problem as the country needs to invest in key areas such as technology, security, and energy transition without significant fiscal flexibility. The low interest rates on French Treasury bonds may currently be manageable, but the mounting debt levels and future challenges require a more sustainable approach to public finances.
The current discussion on public debt in France reflects a deeper issue of long-term financial sustainability and the need for a comprehensive strategy to address the structural challenges facing the country. As France grapples with the implications of its growing debt levels and the constraints of the eurozone, policymakers are being urged to consider a more proactive approach to managing public finances. The upcoming decisions on investment priorities and fiscal policies will be crucial in shaping France’s economic future and its ability to navigate the complex financial landscape both domestically and internationally.
