The author seeks to challenge us on the fact that public debt has not been a part of the debate in France as it has been in Great Britain or Germany. How did we arrive at this sometimes irrational, denied or dramatized relationship?
After financing the war of 1914-18, the Treasury Bond invites itself into homes, and already voices are being raised to note how insufficient the financial education of the public is. The lack of consent to taxation in France prevents any forced savings solution, as in Great Britain, where public debt becomes a sustainable and discreet way of financing state expenditure. After the Second World War, France did not choose rigor and austerity, but decided to settle its war debts through inflation and the devaluation of the franc. The period 1959-1973 saw the return to a more orthodox doctrine which has been described as a virtuous decade, with budget balance once again becoming the priority. After the oil shock of 1973, a generalized social assistance system financed directly by the state was put in place to respond to the concern of public opinion, more concerned with unemployment and its purchasing power than with the budget deficit. Government bond issues were reserved for professionals, which made public debt “invisible”.
Since 1975, France’s budget has never been balanced and its deficit is mainly financed by loans. The word debt was not used and was confused with that of budget deficit. The establishment of the Euro obliged France to be more virtuous, and the theme of debt entered more and more frequently into public debate. With its political and economic weight, France can be less virtuous than other countries in the euro zone. In 2006, the publication of the Pébereau commission’s report “Breaking with the facility of public debt” highlighted the State’s lack of productivity, the proliferation of ineffective actors and instruments, and above all, France’s ease of indebtedness on the financial markets, which played a numbing role, and received a real response from the media and politicians. After the sovereign debt crisis of 2010, debt became a key issue in public debate and became politicized.
Debt plays a major role in balancing public accounts and, in turn, in the standard of living of the population. Since the pandemic and the “whatever it takes” attitude that has made the discourse on budgetary seriousness inaudible, public debt has become a matter of concern. The Court of Auditors issued a warning before the vote on the 2024 budget: “if we do nothing, the explosion of debt will paralyze public action”. The diversion of debt for political purposes prevents a real democratic debate on its social implications. The social divide is coupled with a generational divide that prevents any consensus. This is a decisive collective and political issue that must be addressed quickly.
Chronicle written by Michel GABET