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Presidential 2022: what to do with the Covid debt?

2021-02-21T06:28:22.594Z


Pay it off quickly, later, or cancel it? The issue of debt repayment linked to the health crisis will be one of the challenges


It is no longer a taboo subject.

Debt repayment is now on the table.

A case heavy with consequences since the "whatever the cost" of Emmanuel Macron, adopted without barguigner by all parties, is close to 150 billion euros in spending and should make the debt jump to 122.4% of the GDP this year.

This is double the amount authorized by the Maastricht agreements, signed almost thirty years ago.

However !

This consensus on debt as an economic, social and even political shock absorber hides deep divisions between and within parties.

And discussions on the subject will be at the heart of the debates of the next presidential election.

For the executive, faithful to its European credo, reimbursement is inevitable.

"The debt, we will pay it", insists in small committee Jean Castex.

For Bruno Le Maire, Minister of the Economy, “France's credibility is at stake with regard to its European partners and that of the government, a few months before the presidential election.

"

But if France must honor its commitments, who will pay?

The executive assures us: it will not be the taxpayers.

But the "large international companies (...) which, today, are not sufficiently solicited and which will gradually pay this debt through the European tax system that we are going to build", explained Emmanuel Macron in particular last July.

The Head of State calls for a tax on non-recycled plastic, another on the digital giants as well as a "carbon tax".

The reimbursement will also result from the economic recovery and its tax benefits, savings in public money and structural reforms ...

On the right, some want to put the state on a diet

On the right, financial orthodoxy is defended as well by Gérard Larcher, President of the Senate, as Eric Woerth, boss of the Finance Committee of the National Assembly, or Bruno Retailleau, leader of the Republican senators.

"It is an illusion to make believe that we can erase the debt with a stroke of the pen," warns Valérie Pécresse, the ex-LR president of the Ile-de-France region.

Xavier Bertrand, at the head of Hauts-de-France, has not yet decided.

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Covid-19 crisis: Macron facing the debt wall


For them, the way of life of the State and the administrations will have to be put on a diet.

"The weight of the debt obliges us to lower public expenditure by finally really fighting against all waste and to initiate reforms, such as that of pensions", confides Valérie Pécresse.

Another option mentioned by personalities of all stripes: a reimbursement spread over several years.

Surprisingly, even part of the right is in favor.

Marked by the rejection of François Fillon's too rigorous project in 2017, Aurélien Pradié, number 3 of LR, supported by François Baroin, former Minister of the Economy, or Guillaume Peltier, deputy vice-president, believe that the debt Covid is "a war debt" and must therefore be isolated from public accounts so that it becomes ... perpetual.

Sprawl advocated by the RN

"The Covid debt must be circumscribed, isolated, that we give ourselves ten years to recover before starting to repay it over a long period (...), perhaps thirty or fifty years", warns François Bayrou.

And the Modem boss also "imagined" a contribution from the richest.

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Marine Le Pen and the National Gathering, until few defenders of the European Union, deviate from their Eurosceptic line.

"Canceling the debt would lead to a significant loss of confidence," worries Jordan Bardella, MEP and second vice-president of the RN.

To prevent the Covid debt from weighing down as a burden on the recovery, we are in favor of spreading it over a very long period.

"

READ ALSO>

Covid debt: no urgency to repay it but no cancellation possible, according to Nobel Prize winner Esther Duflo


On the left, Anne Hidalgo, the socialist mayor of Paris, running for a candidacy in 2022, also advocates a "reimbursement spread over time", accompanied by a tax on the winners of the pandemic crisis!

Like online merchants, supermarkets or… pharmacists.

On the other hand, the party is still thinking ... "Olivier Faure is working with economists and will make his position known in the coming weeks," says the entourage of the first secretary.

“It comes down to perpetual debt and therefore non-repayment.

Those who advocate this median solution advance masked, "chokes an elected right.

Part of the left, however, assumes.

For fear that a repayment would lead to austerity policy and fiscal fever.

Clear slate

For the Communist Party as well as for rebellious France, fundamentally opposed to the financial constraints of the EU, the solution is "simple".

"We must cancel these public debt securities," says Jean-Luc Mélenchon.

It won't cost anyone a euro.

No one would be robbed.

"

Former socialist ministers, Benoît Hamon and Arnaud Montebourg, also plead for erasure.

"Central banks know that this debt will never be repaid," said the former presidential candidate.

But these banks, he continues, keep these claims to obtain from the States structural reforms such as reducing the number of civil servants or reducing social spending.

"

READ ALSO>

The cancellation of the Covid-19 debt is "unthinkable", warns Christine Lagarde


Among environmentalists, the Covid debt "is not a problem" and the debate on its repayment is "today not the subject given the low interest rates", insists EELV MEP Yannick Jadot.

For Eric Piolle, the other probable candidate in the Elysee race, this debt, "whether by erasing it or by transforming it into perpetual debt, it must be mobilized, especially at European level, to ensure the ecological transition », Insists the mayor of Grenoble.

The French, poll after poll, do not budge: a majority of them fear both tax increases and cuts in public services ...

Source: leparis

All news articles on 2021-02-21

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