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France’s public auditor on Tuesday warned that the country’s debt level, which is hovering at close to 100 percent, was “worrying” and urged the government to control spending.
France’s debt-to-GDP ratio is set to reach 98.9 percent this year, bucking the downward trend seen in most other eurozone countries after President Emmanuel Macron loosened the country’s purse strings to try end months of often violent “yellow vest” protests.
In a report, France’s Cour des Comptes said the growing divergence between France and its neighbours on debt reduction was “worrying” and “could lead to a deterioration of the perceived quality of France’s debt among investors”.
It chided the government over its failure to take advantage of a spell of growth to significantly rein in overspending, which leads to increased borrowing every year.
“France is far from having eliminated its structural deficit whereas many of its European neighbours have achieved a balance,” it warned in a 150-page report.
No French government has balanced the books since the 1970s.
On coming to power in 2017, Macron immediately set about trimming the deficit to bring it in line with an EU limit of three percent of GDP, which the eurozone’s second-biggest economy had persistently flouted for a decade.
Last year, the deficit fell to a 12-year low of 2.5 percent of GDP, a greater-than-expected decline achieved despite falling growth and purchasing power.
But this year it is set to again rise above the 3.0-percent mark, increasing to 3.1 percent on the back of a package of tax cuts and income top-ups announced to try to defuse the anger of the anti-government yellow vests.
The measures are expected to drive up the public debt to 98.9 percent this year.
The government expects to be back on track with deficit reduction next year. By the end of Macron’s first presidential term in 2022, it is aiming for a deficit of 1.2 percent a far cry from his 2017 campaign pledge to balance the books within five years.
The Cour des Comptes warned against any further let-up in the drive to clean up the country’s finances.
The International Monetary Fund also warned last month that France’s debt was “too high for comfort” and called on the government to cut spending.