According to the High Council, an independent body that is attached to the Court of Auditors, the impact of all of the reforms that the government intends to implement has been “overrated” by the government.
An opinion that was issued on Sunday, the day before the presentation of the draft budget for 2023, stated that the High Council of Public Finances (HCFP) deems “unambitious” the trajectory set by the government to reduce the public deficit by 2027. The opinion was issued on the eve of the presentation of the 2023 draft budget. The HCFP estimates that the trajectory by which the government intends to reduce this deficit from 5% of GDP to 2.9% over the five-year term is also “particularly fragile.” This is because the HCFP believes that the government's assumptions are “overly optimistic” “on economic growth, on the control of public spending, and the increase in compulsory levies.”
According to the High Council, an independent body attached to the Court of Auditors, the government has “overrated” the impact of all of the reforms it plans to implement, particularly in the early years of programming. These reforms include pensions, unemployment insurance, active solidarity income (RSA), and apprenticeship. He emphasizes that “neither the methods, nor the impacts, nor the timetable is documented” for any of these alterations to the system. In the case of retreats, in particular, any savings that were to result would, in any event, be constrained to the duration of the programming period.
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According to the text of the bill that was consulted by AFP on Sunday, the pension reform is not included in the legislation that will finance social security. Franck Riester, the Minister for Relations with Parliament, stated on Sunday that the reform could be initiated using an amendment during the parliamentary debate, or by a text that was specifically dedicated to the purpose. This text forecasts a significant narrowing of the Social Security deficit the following year, bringing it down to 6.8 billion euros from 17.8 billion euros in 2022.
“does not register a rapid return to the objective of balancing public finances, to which France is committed,” the High Council stated regarding the public finance programming bill for the five-year term, which the government is required to present on Monday at the same time as its budget for the year 2023. This statement was made about the fact that the bill was due at the same time as the government's budget for the year 2023. France is now one of the seven countries in the eurozone whose public debt is higher than the gross domestic product (GDP), while it is less than 80% of GDP for 11 of them, notes the HCFP. According to the findings of the HCFP, even if the trajectory proposed by the government is respected, “France will continue to see its relative debt position within the eurozone deteriorate.”
The House Committee on Financial Planning (HCFP) has issued a separate opinion stating that it believes the government's growth forecast of 1% for 2023 is “a bit high.” Although revenues will likely drop the following year as a result of weaker activity than anticipated, they will rise the following year as a result of higher tax receipts than had been anticipated in 2022. After adjusting for inflation, it is anticipated that overall public spending will decrease by 1.1%; however, “the deficit could ultimately be larger than expected due to the underestimation of certain expenses.” In conclusion, the projection for the public deficit for the following year, which is set at 5% of GDP, “is marked by the great uncertainty surrounding macroeconomic developments and in particular energy prices.”