The forecast is getting worse day by day. For the second time in two weeks, as Minister of Action and Public Accounts Gérald Darmanin reminded this Tuesday on Franceinfo, the government is forced to change its roadmap and adapt its project budget for 2020.
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" Every day, every week of confinement that is applied to the country, actually makes public finances worse ," asserts Gérald Darmanin. Now, he said, France should experience an increase in the public deficit around 9% of gross domestic product (GDP) this year, against 7.6% announced last week. Unheard of since 1945. At the same time, the country's debt should " most certainly " climb to 115%, against the 111% expected last week, he announced. The amending finance bill will be presented tomorrow, Wednesday, in the Council of Ministers.
"A stronger impact on our growth"
" It is not because there is a fire that the liters of water are rationed ," he continues. To this, on BFM TV, the Minister of Economy and Finance Bruno Le Maire added expecting a very significant contraction in the economy this year, amounting to 8% of GDP. " The confinement is longer than what could have been anticipated (...) obviously it will have a stronger impact on our national growth ", he said. So far, Bercy had expected a fall of around 6%.
As for the evolution of the situation and these figures, Bruno Le Maire says he is " cautious ". " I would like to be sure that we will stop there, " he says, which of course may not be the case. The same goes for Gérald Darmanin, who recalls that these figures " are indicative " and provisional, because " we are not at the end of the epidemic ". " I first tell the French that we will have to get out of the health crisis and then win the economic war, " he added.
" France is putting in place what no other country is putting in place, " he said, citing in particular the 24 billion euros allocated to short-time working. These measures are taken to " guarantee economic recovery ", adds Gérald Darmanin and " it will take time ". " On May 11 afternoon, we are not going to find the country as it was three months ago, " he said.
The solution cannot be in raising taxes
Gérald Darmanin, Tuesday morning on franceinfoTo cope with these historically low figures, Gérald Darmanin once again rules out a possible tax hike. " The solution cannot be in raising taxes because it would profoundly contradict what the President of the Republic has done for the first three years of his mandate, " he defends.
Wanting to be reassuring, everything that is implemented to deal with the shock is not structurally, he says. Bercy estimates, for example, that the 24 billion allocated to short-time working "will disappear " when " people return to work ". " When there is recovery, people can again pay their taxes and their charges " which were shifted during the crisis, further details the minister. Thus, according to him, France will not drag this very significant deficit “ for years, even if our economy will have been very upset. "
Gérald Darmanin finally ensures that he is not working on a possible postponement of the abolition of the housing tax, which should be spread for the wealthiest households until 2022.
