France’s Court of Auditors has called for drastic cuts given the country’s high debt burden. Despite warnings, the government relied on overly rosy growth prospects, the Court of Auditors said in its annual report in Paris on Tuesday.
If the national deficit is to be reduced below the EU limit of three percent by 2027, as planned, a further €50 billion would have to be saved in the budget by then. Just like last year, France remains one of the worst performing countries in the eurozone, with a national debt of 110 percent of gross domestic product. In addition to spending cuts, ambitious reforms in key sectors are needed to get public spending under control in the long term.
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“Savings unprecedented in recent history are necessary,” said Auditor General Pierre Moscovici on Tuesday to the business newspaper “Les Échos”. Social benefits and municipalities could not be exempted from this. “Our situation contrasts not only with traditionally frugal countries such as Germany, the Netherlands and Austria, but also with Portugal, whose national debt is now below 100 percent of gross domestic product,” Moscovici explains.
“The challenge is to achieve huge savings without damaging growth,” Moscovici said. Investments in the future, for example in research, ecology and social cohesion, must remain possible. “It’s not about cutting back on investments, but about being able to finance them. To invest in ecology, innovation or education, we absolutely must reduce debt,” said the former EU Commissioner for Economic Affairs and Finance.
Source: Krone
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