France’s credibility in Europe depends on a deficit below 3%, says Villeroy de Galhau, the governor of the Bank of France.
Getting the deficit below 3% requires a budgetary effort of 4 billion euros.
It’s far from certain when, to achieve this, the public accounts must be managed.
The government has promised that the deficit would fall below the 3% threshold in 2017 – better yet, it should be around 2.7%. This is becoming less and less likely: the growth is not as strong as expected and, in this election period, the authorities have increased unforeseen expenditures.
As a result, the Bank of France has estimated a deficit of 3.1% for next year.
For Villeroy de Galhau, its Governor, fiscal stimulus cannot help accelerate growth: “France will only be legitimate in asking the Germans for a stimulus if it is credible itself in speeding up its reforms and on its budgetary commitments.”
“Regarding public accounts, France will only be heard in Europe if it is trusted. We must adhere to our commitment of a deficit of less than 3% of GDP in 2017,” states the governor.
Getting under the 3% requires savings of 4 billion euros, which represents 0.3% of public spending.
However, this will not be the case in 2017.
The message is conveyed to the Presidential candidates.
