2024

Note

<p>The French economy is at a crucial turning point. The public deficit has reached a historically high level and is weighing heavily on state finances. In response to this situation, the Council for Economic Analysis (CAE) has formulated radical proposals. These measures, while ambitious, are provoking strong reactions and raising many questions.</p>
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     <p lang="fr" dir="ltr">Une nouvelle Note du <a href="https://twitter.com/CAEinfo?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">@CAEinfo</a> d'Adrien Auclert, Thomas Philippon et Xavier Ragot décrypte l'évolution de la dette publique, définit la trajectoire crédible de stabilisation et propose des solutions pour réduire le déficit public à court et moyen termes.<br><img src="https://s.w.org/images/core/emoji/14.0.0/72x72/27a1.png" alt="➡" class="wp-smiley" style="height: 1em; max-height: 1em;"><a href="https://t.co/G2rbTiYBql" rel="noopener noreferrer nofollow">https://t.co/G2rbTiYBql</a></p>— Conseil d'analyse économique (@CAEinfo) <a href="https://twitter.com/CAEinfo/status/1816031968150049118?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">July 24, 2024</a>
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  The CAE proposes solutions to reduce the public deficit in the short and medium term
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<h2 id="h-the-french-economy-faces-an-unprecedented-budgetary-challenge">The French economy faces an unprecedented budgetary challenge</h2>
<p>The public debt of France reaches 110% of GDP, or 3.160 trillion euros. The public deficit is 5.5% of GDP, which represents 154 billion euros. It is an unprecedented situation that undermines <strong>the country’s economic stability</strong>.</p>
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<p>To address this situation and revive the economy, the CAE published <a href="https://www.cae-eco.fr/staticfiles/pdf/cae082-note-fipu.pdf" target="_blank" rel="noopener noreferrer nofollow">a note</a> on July 24, 2024. It recommends drastic budget consolidation of around 112 billion euros over several years. This measure is necessary to save the economy, but it also risks hampering growth and penalizing the most vulnerable.</p>
<p>Indeed, <strong>too rapid budgetary consolidation</strong> could have harmful consequences for the economy. It is essential to find a balance between the need to reduce <a href="https://www.cointribune.com/en/economy-could-the-public-deficit-in-france-be-a-time-bomb/" target="_blank" rel="noopener noreferrer nofollow">the deficit</a> and maintaining growth.</p>
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<h2 id="h-saving-the-french-economy-the-avenues-proposed-by-the-cae">Saving the French economy: the avenues proposed by the CAE</h2>
<p>To achieve its goals and revive the economy, the CAE proposes several avenues, including:</p>
<h3 id="h-increasing-taxes">Increasing taxes</h3>
<p>The CAE suggests imposing <strong>temporary taxes</strong> on exceptional profits and freezing certain social benefits. These measures would provide significant budgetary leeway.</p>
<h3 id="h-reducing-public-spending">Reducing public spending</h3>
<p>The council recommends reducing public spending by refocusing apprenticeship aid on the less qualified. This would result in <strong>savings of 4 billion euros</strong>.</p>
<h3 id="h-pension-reform">Pension reform</h3>
<p>Although not explicitly mentioned in the CAE report, the reform of <a href="https://www.cointribune.com/en/bitcoin-joins-french-retirement-savings/" target="_blank" rel="noopener noreferrer nofollow">pensions</a> is an important lever for improving the public finances situation.</p>
<h2 id="conclusion">Conclusion</h2>
<p>The choice of economic policies to implement will have lasting consequences on the economy of France. It is therefore essential to conduct an in-depth debate on the different <a href="https://www.cointribune.com/en/france-on-the-brink-of-bankruptcy-bruno-le-maire-sounds-the-alarm/" target="_blank" rel="noopener noreferrer nofollow">options</a>.</p>

Economy: The CAE Proposes Radical Measures to Reduce the French Public Deficit

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