French Government To Blame for the Deepening Deficit

Since the Cour des Comptes (the French official auditing body for public accounts) accused the State of being partly to blame for the deepening public deficit last Tuesday, the controversy has grown more violent by the day. Eric Woerth, minister for the budget, insists that “the aggravation is to be put down only to the crisis.” The public deficit rose from 3.4% to 7.9% of the GDP in 2009. The Cour des Comptes report contradicts the government’s version, as did Philippe Marini, general reporter for the Senate financial committee the following day: the UMP (Rightwing) senator considers that some fiscal decisions did “aggravate the public deficit”, like the VAT cut from 19.5% to 5.5% or the repeal of the local business tax [1], which alone “cost the State €5 billion”. The government’s promise to Brussels to bring the deficit down to 3% by 2013 forebodes an even more painful austerity plan after the regional elections, short of a change in the country’s fiscal policy.