Three scenarios to lower public spending

Reducing public expenditure by three percentage points of GDP in five years is the aim of a report, published by France Stratégie on Thursday (17 January), so that the country can return to the level of its European neighbors.

The weight of public spending must be the number one topic of the great debate ", Said Friday, January 18, the president of the Medef, Geoffroy Roux de Bezieux. The day before, the France Stratégie expert organization published an analysis note entitled Where to reduce the weight of public spending?

Three possible scenarios

With public spending reaching 56.5% of GDP in 2017, France has the highest ratio of the European Union. To return to a level close to that of its Western European neighbors, it should reduce the weight of these expenditures by three percentage points of GDP in five years. " We are considering three scenarios that are not propositions as such "Says Fabrice Lenglart, Deputy Commissioner General of France Stratégie.

A first scenario is to reduce public spending by not touching the social sphere, dedicated mainly to the financing of pensions, nor to the regal sphere (defense, justice, police). " This would amount to excluding almost three-quarters of public expenditure ", Says Fabrice Lenglart.

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The problem: even reducing all other spending to the average European level would only lead to a drop of 2.2 percentage points of GDP. "Especially since this would involve dividing the public investment of local authorities by two in five years, He adds. Even though it has already fallen sharply in recent years. "

A second option would be to preserve or even increase certain public expenditures, especially for sovereign functions and education. The effort would then focus on posts outside the social sphere - pensions would not be affected - and especially on market health. But this would necessarily imply a part of the reimbursement of care, which would be difficult to imagine.

Preserve priority expenditures

The last scenario, favored by France Stratégie, because "More balanced"would consist of "To preserve certain expenses considered as priorities (education, defense, justice, investments in favor of the ecological and energetic transition)"but to restructure the healthcare system to slightly reduce health expenditure, and especially to cut social benefits, especially pensions, which represent 3.4 points of GDP more than the European average. "The decisions taken by the government to partially deindex pensions in 2019 and 2020, as well as the desire to better control unemployment insurance spending, are going in this direction", says the report.

Reducing the weight of public expenditure by three percentage points of GDP in five years would therefore be an achievable goal, since, as the report states, " twenty-one European countries out of twenty-seven have achieved at least once in the last 20 years ".

It remains to be seen how to make these measures acceptable in a context marked by claims on the purchasing power and maintenance of the public service.

Clément Grillet