Simone Wapler – La Chronique Agora (France) –
The last deficit figure could suggest an improvement in public finances. In reality, the growth of the “off balance sheet” is very worrying.
The time is right. The media are enthusiastic about the very modest deficit of France: 2.6% of GDP.
“Limited budget deficit”, “in European nails”, “under 3% for the first time since 2007”. Our public finances are bathed in butter, to hear some media.
Others, like Le Figaro or Les Echos are more reserved. The first speaks of “improvement in trompe l’oeil”. The second speaks of the “record tax burden”.
The figures do indeed have something to chill: the French state is still spending more year by year; the least deficit is due to more tax and a little more growth, which increases tax revenues. The compulsory levy rate rises to 45.4% of GDP and public expenditure represents 56.5% of GDP.
Debt reaches 97% of GDP. In 2018, interest should cost 42.1 billion euros and Agence France Trésor has planned to borrow 195 billion euros: the deficit and what is necessary to roll the loans coming to maturity by indebted to new. This cavalry was so easy since interest rates were falling steadily. This period is coming to an end.
Once you have all this in mind, the mass is not yet said. We must mention the “black debt”, also called “off balance sheet”.
An abyss of 4 070 billion euros
The last report of the Court of Auditors on the subject dates from 2013. Only a few observers are interested in this obscure accounting. The enarque economist Jean-Yves Archer is one of them.
“When parents agree to stand surety for the future rents of one of their children, they do not pay anything but subscribe to an obligation to do. In case of failure, they will be called in warranty.
For a company or for the State, the same principle exists and is called off-balance sheet commitments.
This accounting term, which must appear in a summary table in the annual accounts, relates to the guarantees of liabilities granted, leasing transactions, etc. “.
The black debt represents already planned expenses, all the future commitments of the French State and its guarantees that would only be activated in case of default.
In 2016, the amount of off-balance sheet was approximately 3,200 billion euros. In 2017, according to Jean-Yves Archer, it represents 4,070 billion euros. Where does this explosive growth come from? To understand it, it is necessary to detail this vast catch-all.
The retirement of public officials, heavy burden of black debt
State officials receive a pension punctuated directly from the state budget. The future pensions of serving staff are therefore a commitment of the State. There is 2,150 billion euros.
Not reassuring when we know that the number of civil servants increases. You also understand why attempts to bring the civil service system into line with that of the private sector are always quickly buried. [Ed: Improve your retirement, it’s possible! Have you heard of the “Brongniart Plan”, well known to the veterans of the stock market? Our specialist offers you here to dedicate 200 € per month to assure you a retirement of minister.]
Note that the OECD challenges our presentation of public compatibility on this point and would like the debt of France to include this item. That would make our debt-to-GDP ratio double, roughly going to 200% … Not certain, under these conditions, we always get the issues of French debt.
Remains 1 920 billion euros.
Clues ? Do you hear those train noises? Do you remember Dexia or Crédit Lyonnais? Do you see these fumaroles over Areva and EDF? …
We will look at these fragrances tomorrow.