France’s President, Emmanuel Macron is facing huge domestic leadership challenge as the country’s public-sector debt topped three trillion euros ($3.25 trillion) for the first time ever.
According to official statistics released Friday which presented data for the first three months of 2023.
Following a massive surge of borrowing to cushion the impact of the coronavirus and cost-of-living crises, the debt level reached 112.5 per cent of annual GDP at 3.01 trillion euros by the end of March, far above the European Union’s target of 60 per cent.
On Tuesday, March 28, the National Institute of Statistics and Economic Studies (INSEE), stated that government debt stood at €2,95 trillion at the end of last year, 111.6% of gross domestic product, only down slightly from the third quarter.
On the back of a continued upturn in tax revenue boosted by inflation, the 2022 deficit was slightly better than expected, at 4.7% of GDP, when the government was targeting 5%.
“INSEE’s figures for 2022 confirm that French growth is holding up well, so is our tax revenue, particularly corporate income tax,” said Bruno Le Maire, France’s economy minister. “Our strategy remains the same: Improve France’s growth to reduce debt and control spending.”
On the question of whether a public debt close to the €3 trillion mark could cause alarm in the context of generalized debt addiction, Frédéric Dabi, a director general with polling institute IFOP, said-“In our November 2022 barometer, reducing public debt came at the bottom priorities of those surveyed, only ahead of the fight against Covid and the European Union,”
The hundreds of billions of euros poured in the wake of the Covid-19 pandemic, and then inflation, have “shown that we can live with debt,” Dabi said, adding that “The macroeconomic argument did not work this time to justify the pension reform whereas it was very present when the [retirement] age was raised to 62 in 2010.”