The president of the Assembly of French Departments (ADF), Dominique Bussereau, presents a worrying observation in an interview with Les Echos. It should be noted that the combined budget of the departments is 80 billion euros per year.
According to him, some departments are in such a critical financial situation that they are on the verge of bankruptcy!
He explains that the departments’ tax revenues “are stagnating and state allocations are decreasing.” At the same time, “the state has not fully compensated for the payments we make on its behalf to social providers.” As a result, by the end of July, the cumulative shortfall for the departments is 8 billion euros.
For this reason, he estimates that “between one and five departments risk declaring bankruptcy by the end of the year if nothing is done.” Ultimately, around thirty departments could even be in this situation by the end of 2016.
Which departments specifically? “The most critical is the Nord, whose previous administration had only budgeted eleven months of RSA out of twelve.”
The situation is serious because it means that departments might be forced, due to lack of funds, to stop social payments.
Among the options considered to get the departments’ finances back on track are “providing additional resources to the departments most in difficulty” as well as considering a “re-centralization of social funding.”
