Compromised last July with the highest euro to 1Implicit default rates are still too highVivendi in 2002 it was in fact 35 billion euros of debt and lossesOnly 20 of our fellow citizens are mobilized on this issueNicolas Sarkozy should push to pragmatismWe will grant three new blocks to exploreA slope and a return to the previous levelThe cost of his gesture is also insignificant 1Three projects have been labelled on this projectA way to counter the expansion of Lufthansa in EuropeIt is a speech of "truth" that stated the Government with the 2009 budget, on 26 September. But the truth of a day is not that of the next day. And it is a new "crisis", "lucid" and "realistic" that have detailed, yesterday, the economy Minister, Christine Lagarde and Budget Minister, Eric Woerth, before (few) senators, who have had the scoop of the revision of the prospects for growth and deficit in the review of programming 2009-2012 of the public finance bill. The Executive does not therefore expected new mid-November Insee statistics (growth in the third quarter), as initially expected to take note of the impact of the economic and financial crisis.
Continue to debate in Parliament budget obsolete texts had little meaning. Uncover these new figures now aims to take advantage of the media effect Obama, and to avoid "polluting" the World Summit on the reform of capitalism, November 15, in which the France intends to make good.
Tax losses
On the merits, the Government delivers the reasoning which is his own since the beginning of the financial crisis: do not compensate for the tax losses related to the economic downturn even let spin the public deficit, without so far release the valves of the expenditure. This game of "automatic stabilizers" will have a quick impact on public finances. For this year, Budget Minister, Eric Woerth, anticipates now 7 billion euros of tax losses (2 more than the end of September), which will cover the deficit of the State to EUR 51.4 billion, against... 38.4 billion end of 2007, and the public deficit to 2.9 of GDP. And this still posting growth of 1.
For 2009, the slope is stiff. The prospect of a growth of 0.2 to 0.5 instead of 1, is going to lose some EUR 9 billion of income tax and social over a goal still presented as careful a few weeks earlier... This brings the Government to show a projected deficit of the State of EUR 57.6 billion next year, or never voted the most important imbalance in initial Finance Act. With a balance of social security slip beyond 10 billion public deficit would reach 3.1 of GDP, above the European limit, "but it's no escape of the stability pact." "The Commission reiterated that it would take into account the exceptional circumstances", said Eric Woerth.
For Gilles Carrez (UMP), however, "it is clear that it will approach the 3.5 in 2009 if it"tangent"3 this year." The rapporteur of the Budget to the National Assembly is concerned in addition of "temptations that specify to affect the expenditure", especially knowing that the 100,000 assisted contracts should cost between 600 and 700 million euros next year for the whole public actors (State, communities), even if Eric Woerth said that it continues to ensure the grain. In fact, the Elysee and Matignon closely watch recovery plan just be concocted German.
Optimism in 2010
As the rapporteur of the Budget in the Senate, Philippe Marini (UMP), it has reaffirmed yesterday that the forecast of a return to the balance of the budget of local authorities was "unrealistic". PS, for its part, deplored that "the Government make no finding of this downward revision", now the "expensive" fiscal package and "by not renouncing not to reduce the budgets of housing and employment" (see page 4).
That think the European Commission of this new copy French scenario for 2009, table of the financial crisis effects tempered by lower inflation and the euro, can defend itself, even if a new revision may be necessary. Displayed optimism in 2010, with growth leaping to 2 and public deficit reduced to 2.7 of GDP, was surprise and does not at all with the Brussels forecast table on a French deficit reaching a peak of 3.8. Beyond 2009, "the exercise of the Government is of the incantation", slice Eric Heyer of OFCE (see page 3). Even based on this scenario, the debt exceed 68 of GDP in 2010, a new sign of the extent of the shock to public finances.
