France’s sovereign debt: call a spade, a spade
International Network - March 31, 2024
The objective of the finance law for 2024 was to reduce the deficit to 4,4% of GDP (after 4,9% in 2023), the government had decided to make savings amounting to 10 billion euros by reducing the 2024 budget. However, despite all these announcements, the deficit seems once again higher than expected and greater than 5% in 2023.
It has been more than 50 years since France's budget has been in balance:
At the end of the last quarter of 2023, our country's public debt amounted to 3.088,2 billion euros according to INSEE, an increase of 41,3 billion euros (after an increase of 34,5 billion euros). euros in the previous quarter).
The 2024 finance law passed thanks to 49.3 and therefore under the sole responsibility of the current majority provided that the State's forecast financing requirement would reach 295,8 billion euros, mainly due to a budget deficit of 144,4. 156,4 billion euros and 2024 billion euros of medium and long-term debt amortization maturing in XNUMX.
And the EU in all this
France is also well above the average deficit of the twenty-seven (82,6%) of the EU, with a debt which reaches 111,9% of its GDP, or more than 3 billion euros. . Conversely, Estonia (000%) and Bulgaria (18,2%) currently have the lowest debt rates within the EU.
However, some will tell me that all this is linked to management from the right or the left. Are you sure? this diagram shows the opposite:
Today, at the end of March 2024, Bercy admits that for 2024 the deficit will be 5,6% of GDP instead of 4,9%, therefore increased by some 20 billion euros, calling into question its reduction trajectory.
Comparing cabbages to carrots
So if France's debt is equal to the cumulative difference in state budgets and therefore a difference between expenditure and revenue collected thanks to taxes, why then compare our deficit or our debt to the nation's GDP.
Isn't it stupid to put cabbages versus carrots into the equation?
Indeed, GDP, or gross domestic product at market prices, aims to measure the wealth created by all agents, private and public, on a national territory during a given period. It represents the final result of the production activity of resident producing units. In short, the French state does not dispose of it as it wishes. So let's be more rigorous and compare the deficit and debt to our tax revenues.
Tax revenues
Here are the figures for state revenue by type of tax in France for the year 2023:
Gross tax revenue: 470,6 billion euros
Value added tax (VAT): 176,3 billion euros
Income tax: 113,4 billion euros
Corporate tax: 86,8 billion euros
Registrations, stamps, other contributions and indirect taxes: 40,2 billion euros
Other direct taxes and similar taxes: 31,4 billion euros
Internal consumption tax on energy products: 18,3 billion euros
Other direct taxes collected by issuing tax rolls: 2,4 billion euros
Social contribution on profits: 1,6 billion euros
In sum, the total net revenue of the general budget (after deduction of reimbursements and reliefs) is projected at 349,4 billion euros in 2023, with an increase of 5,2% compared to the previous year.
It is important to note that these figures are revised evaluations for the year 2023 (source: https://www.insee.fr/fr/statistiques/2381416)
All this therefore means that if we devoted all of our tax revenue to repaying the debt we would need: €3088,2 billion / €349,4 billion = 8 years and 10 months to repay it by depriving ourselves of all services of State.
