France: the public debt contained at nearly 100% of GDP

The public debt of France remained under the symbolic threshold of 100% of GDP in the second quarter, but exceeded this threshold in the last year by incorporating the debt of the SNCF, a level that is bearable only if the interest rates remain low, warn the economists.

The public debt reached 99% of GDP at the end of the second quarter to 2.299, € 8 billion, after the consolidation of the debt of the SNCF in statistics, decision applied retroactively starting in 2016, announced the Insee on Friday.

The debt calculated with this new item, a decrease of 0.3 points compared to the 1st quarter. If it has decreased as a percentage of GDP, it increased to 5.2 billion euros compared to the previous quarter.

But with this new method of calculation, the public debt of France has in fact already exceeded the total of the national wealth during the next two quarters, reaching in 2017 100,7% in the 1st quarter and with 100.9% in the 2nd, before decreasing for the rest of the year.

In the first quarter of 2018, it has once again risen to 99.3% of the debt of the State progressing traditionally during the first six months of the year before falling back to then.

“The debt is projected to decline until the end of the year. In 2019, it will be hardly stabilized due to the replacement of the CICE (tax Credit for competitiveness and employment, editor’s NOTE) by reductions of charge, that fact that we pay twice 20 billion,” notes François Ecalle, former judge of the Court of auditors.

“In cash, it’s going to force the State to incur debt a little more. Therefore, the debt is just stabilized. After 2019, if the forecasts (of growth) are good, it should be permanently reduced,” says this expert in public finance.

With a projected growth to 1.7% and an expected inflation to 1.3% in 2018, “it is normal that the debt decreases” with a budgeted deficit at 2.6% of GDP, see also Patrick Artus, chief economist at Natixis.

But “next year it’s going to be a lot more fair because there will be a little less growth and because the government has targeted 2.8 percent as an objective of public deficit,” adds the analyst.

-“Very bad signal”-

The real question for Mr. Artus, however, is not whether fiscal policy will allow a slight reduction of public debt, but if rates of interest remain at a level low enough to ensure that the debt remains sustainable.

For the moment, this debt is sustainable, this is not a danger to the public finances,” assured Pierre Moscovici, the european commissioner for economic and financial Affairs on BFM TV. “It is absolutely necessary to control it, master it, but it must return to the path of the debt-reduction”, he advised the French government.

While the european central Bank (ECB) is considering raising its rates after the summer of 2019, the countries of the euro zone will be particularly vulnerable, as they are indebted.

“With long-term rates to 1.5% (compared to 0.75% over ten years now), you can have a debt of 100% of GDP”, says Patrick Artus, adding that “if it was 4%, the big trouble would begin”.

Mr Ecalle highlights the gap with Germany, whose public debt is rapidly diminishing and could drop below the 60% limit set by the Maastricht treaty at the end of this year.

“The German debt to 60%, and the French debt at almost 100%, it is a signal which is very bad for the cohesion of the franco-German”, according to him.

Mr. Artus excludes from his side that France is committed on the way to a drastic reduction of its public debt to converge with Germany.

“We don’t want to do it and it can not be, given the constraints on public spending that we have today”, he says.

For him, “the bet of the european countries that did not, such as Germany, that is to say France, Italy, Spain, Portugal, etc, is that the ECB will reduce interest rates in a region that is dangerous, one reason being that the ECB would not dare to trigger a fiscal crisis in these countries”.

source: kozpost.com

اقترب الدين العام في فرنسا من العتبة الرمزية 100 % من إجمالي الناتج الداخلي في الفصل الثاني مع دمج ديون الشركة الوطنية للسكك الحديد، بحسب ما أعلن معهد الإحصاءات الفرنسي أمس الجمعة.

وبلغ الدين العام 2299.8 مليار يورو مع إدماج ديون السكك الحديدية، الذي بات يعتمده معهد الإحصاء منذ 2016. ومع طريقة الحساب هذه، فإن الدين العام في فرنسا تجاوز إجمالي الثروة الوطنية في الفصل الثاني من 2017، وبلغ 100.9 % من إجمالي الناتج الداخلي قبل أن يتراجع في باقي العام.

وفي وقت يزمع فيه البنك المركزي الأوروبي رفع نسب فوائده صيف 2019، لا تزال دول منطقة اليورو تبقى منهكة ومدينة.

وأشار فرنسوا ايسكال -القاضي السابق في هيئة المحاسبة- إلى الفارق مع ألمانيا التي يتراجع دينها بسرعة، ويمكن أن يتراجع إلى ما دون عتبة الـ 60 %، التي حددتها معاهدة ماستريخت نهاية هذا العام. وأضاف قائلاً: «إن واقع أن الدين الألماني عند 60 %، ودين فرنسا عند 100 % تقريباً، مؤشر سيء جداً للتناغم الفرنسي الألماني».

أما باتريك أرتو، فأعتبر أن «رهان الدول الأوروبية التي لم تفعل ما فعلته ألمانيا، أي فرنسا وإسبانيا والبرتغال وغيرها، يتمثل في أن البنك المركزي الأوروبي لن يراجع أبداً نسب فوائده في منطقة خطيرة»، ما ينذر بالتسبب في أزمة ميزانية في هذه الدول.

وتملك إيطاليا بدين بنسبة 131 % من الناتج الإجمالي أعلى دين في المنطقة بعد اليونان. وتراجع دين إسبانيا إلى 98.1 % من ناتجها الإجمالي (أي 1164 مليار يورو) في نهاية يونيو، بحسب معطيات نشرت أمس الجمعة.;