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Covid debt: no confinement but a golden rule on spending

2021-03-18T11:34:28.798Z


A committee of experts chaired by Jean Arthuis recommends the establishment of a multi-year expenditure standard.


The restoration of public finances, undermined by the health crisis, must go through the control of spending in the future, in particular via a golden rule on public spending, recommends Thursday a commission of experts chaired by Jean Arthuis, who deems a cantonment of the Covid debt unnecessary.

Read also: France today suffers from its lack of strategy to reduce public spending

This rule would be a multiannual expenditure standard, which would be defined at the start of the legislature in a public finance programming law and which the executive and the Parliament should undertake to respect each year, specifies the report of this commission, installed in December by the Prime Minister and led by the former Minister of the Economy.

It would thus be the "

new compass of our public finances

", with "

a counter of the gaps in each sector

", detailed Jean Arthuis in an interview with AFP.

Read also: Pensions weigh more and more heavily in public spending

In addition, there must be a perimeter and a minimum level of spending for the future (ecological transition, education, research, artificial intelligence, etc.), adds the report.

"

We are proposing a rule: we must ensure that the evolution of expenditure is lower than the evolution of revenue

", ruling out any further increase or decrease in the level of compulsory levies, insists Jean Arthuis.

"

The dynamics of indebtedness are worrying

"

This proposal is the first of three pillars of a "

transformation of fiscal governance

" made essential by the financial consequences of the health crisis, according to the commission made up of ten members, including economists and political leaders (Marisol Touraine ) or business leaders (Laurence Parisot, Augustin de Romanet).

Last year, public debt soared to around 120% of GDP and is expected to increase further this year, according to government forecasts.

If France has no difficulty in financing itself currently, "

the dynamics of indebtedness (...) is worrying

", judges the report however.

Identify Covid debt without confining it

Regarding specifically the Covid debt, estimated at 215 billion euros by the government, the committee recommends identifying it clearly, for the sake of transparency, but without necessarily confining it, as proposed by the Minister of the Economy Bruno The mayor.

"

If there is a cantonment, we must find a recipe, and a recipe is a new tax

", hypothesis rejected by the commission, defends Jean Arthuis.

"

This would amount to imposing a constraint of schedule to extinguish this debt when it is in fact more legitimate

" and "

this would not change the question of the level of the debt and its sustainability

", argues the report.

Source: lefigaro

All news articles on 2021-03-18

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