Total public expenditure should grow by 0

Give firm committed to the Germany, in Brussels and the financial markets, without impeding the resumption or jeopardize cooperation on pensions: this is the difficult equation under Nicolas Sarkozy today, at the second Conference on the deficit. Pressure has increased since the holding of the first meeting, on 28 January. The German Government put pressure on its partners in the euro area for the registration of a deficit ceiling in their Constitution. Rating agencies closely monitor States. And the Commission wants to know more specifically, here at June 2, the manner in which the France intends to bring its deficit below 3 of GDP in 2013.

Its commitments to Brussels, the State, social security and local communities to reduce their spending of 50 billion euros in the three next years, a total of 1,000 billion euros. This is a goal that never was reached, near or far, during previous periods of austerity. The effort is all the more ambitious that it arises in a context of moderate growth and that the Government excludes any general increase in taxes.

Companies involved

The action of the State focuses largely on spending. And it involves a real horse cure: expenditures of the State shall not advance more rapidly that inflation (retirement pensions and expenses debt included), which implies a gel, value, credit of ministries. Operating and intervention expenditure (support to companies, social aid, etc.) will be eroded by 10 over three years, according to the letter of framing of Matignon. Medicare spending should rise by less than 3 per year (see below). Local elected representatives, they accommodate strict gel for the holdings of the State. Total public expenditure should grow by 0.6 per year in addition to inflation (3 last year).

The French and the companies will also put to contribution: fiscal and social niches (75 billion euros) will be reduced by EUR 5 billion over two years. An effort to scale, but with terms should not be detailed before the drafting of the Bill of finance 2011, this summer. In view of the efforts to achieve, the coup of General plane on a part of the niche is however more doubt. The Government is also very attempted to calculate the relief of loads of companies on a rather than monthly and annual basis, which would save 2 billion.

But Nicolas Sarkozy is especially expected on the introduction of binding rules of public finances in the Constitution. "Nothing really significant political will does without amendment of the Constitution", said a relative of the folder. End of January, the head of State wished that "the France establishes a rule of balance for the whole of Government", while seeking a consensus on the issue. This is not the case at this stage, even if the commission chaired by Michel Camdessus is unanimous in appreciating urgent the need for strong measures (see below).

The Elysée at the same time should discuss at European level from a toughening of the rules in the euro area, which does not facilitate the exercise. The France grows to the automaticity of sanctions when a Member State does not respect its commitments. Another message key to give credit to the fight against the deficit: the reform of pensions, which will aim to fill all of the need for funding to the horizon of 2020-2030.

France: the return of the rigour lesechos.fr/record

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