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State budget: spending up in 2021, and not always linked to Covid-19

2022-07-04T16:22:54.469Z


This persistent imbalance makes the debt ever heavier for the State, alerts the Court of Auditors, which notes "sprains to budgetary principles" last year.


The health crisis does not explain everything.

In its annual report on the State budget (RBDE), the Court of Auditors looked at public spending during the year 2021. And it draws up a severe observation: even if the uncertainties linked to the crisis health have led to an extension of certain public aid schemes, covid-19 is not the only one responsible for the inflation of State expenditure.

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These are up sharply, to 426.7 billion euros in 2021, i.e. 37.1 billion more than in 2020, at the height of the health crisis.

However, the year 2020 had already marked a very strong increase in public spending, with 53.6 billion euros more spent than the previous year.

State expenditure from 2012 to 2021. Annual report on the State budget (RBDE).

This new increase in spending during 2021 is linked to the implementation of the recovery plan (19.6 billion), the cost of the inflation compensation put in place urgently by the government (3.3 billion ), or even the increase in the weight of debt interest (2.0 billion).

Expenses are increasing, and are not necessarily scrutinized closely enough, according to the magistrates of the Court.

In an analysis note devoted to the Recovery plan mission, the Court of Auditors had already criticized this plan envisaged by the government, and for a total amount of 100 billion euros.

Its implementation was considered “

complex

” and its overall logic “

lacking in coherence

”.

Moreover, last March, the President of the Court of Auditors Pierre Moscovici had called for

“a certain vigilance in the pursuit of the implementation of the recovery plan, to prevent it from contributing to accentuating them”.

A growing debt

The State can at least count on an increase in its revenues, thanks to the economic recovery.

This does not allow the accounts to balance, since the receipts only cover 60% of the expenditure.

But they increased by 38.2 billion euros, for a total of 255.2 billion.

And this, in particular thanks to the growth of tax revenues.

"

Beyond the strong uncertainties linked to the current geopolitical context and its economic and budgetary consequences, the review of management for 2021 leads to highlighting several significant risks on the trajectory of expenditure for the years to come

", thus estimates the Court in a press release.

She mentions in particular the future increase in the interest expense of the debt due to inflation, and “

residuals to be paid (expenses incurred to be paid over the next few years) in strong progression

”.

Because the state debt stood at the end of 2021 at 2,145 billion euros, up 144 billion euros over one year.

The debt burden has also increased, which greatly weakens the State in a context of rising interest rates.

"

The high level of State debt makes the interest charge very sensitive to a rise in rates

”, thus warned the Court of Auditors.

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The Court of Auditors is also looking into "

breaches of budgetary principles

" over the past year.

The government in fact carried over credits at the end of the year which were “

much higher than those usually observed

”.

An attack on the “

principle of annual budget

” which, according to the Court, weakens the voice of Parliament on expenditure and harms “

the readability of finance laws

”.

To this criticism, the Ministry of the Economy responds by highlighting the context of uncertainty of the health crisis.

Source: lefigaro

All news articles on 2022-07-04

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