Take advantage of these two years of respite to reform Drawing Alain Brillon
The two-year period allowed France to return to below the 3% deficit was necessary to maintain the objective of consolidating public finances without stifling the return of growth. But these two additional years are not without counterparts, they are part of an implicit contract between France and Europe.
The European Commission promotes differentiated fiscal consolidation between countries and between different types of public spending. This policy is accompanied by growth measures for the whole of Europe: voluntarist action by the ECB; reform of the internal market; reorientation of the Structural Funds; loans from the European Investment Bank; encouragement of financing for SMEs and social enterprises; not to mention our 28 laws of financial regulation to avoid the repetition of a crisis comparable to that of 2008. The Commission’s forecasts show that we are at a moment of truth for France: our GDP should fall by 0.1 % in 2013. The number of unemployed has never been so high. As for the deficit of our public accounts, it should reach 4.2% of GDP in 2014 with unchanged economic policies, against 2.8% on average in the eurozone.
The postponement of the deficit target should not call into question the seriousness of the budget.
The return to good management of our public accounts is first and foremost in our interest, French. Our public debt is now close to the annual amount of national wealth. And we are devoting more money to the debt burden than to raising our children. We must continue to reduce deficits committed from 2010. By striving to reduce spending rather than raising taxes.
Secondly, France must use these two additional years to improve its competitiveness. For too long, our trade and current account balance has been sinking into deficits that reflect our loss of competitiveness, and therefore our decreasing weight on the global economic stage. The competitiveness pact and the agreement of the social partners on employment go in the right direction. Let’s go further: reform our labor market; emphasize learning and lifelong learning; simplify our administrative organization; remove blockages to the creation and financing of businesses; continue the pension reform. The Welsh report laid out the road ahead. It must be implemented in its entirety. We will not restore our public accounts without restoring our competitiveness. All this will require political courage. On the part of the government, which must launch reforms that will not always be popular but necessary. On the part also of the opposition, which must play a constructive role by taking note of the government proposals that go in the right direction and working with the majority on reforms of national interest. On the part of the social partners, finally, who will be all the more autonomous and respected that they will negotiate in mutual respect and explore without a priori new ideas. The postponement of the deficit target gives us time to focus on these reforms. Do not waste that chance for debt consolidation Thinkstream thinkstream.net/2008/08/08/the-right-to-accountable-america-bring-it-on/ more information.