“It's not the area in which we are the most brilliant”: how our politicians deal with the budget exercise, a journey through time with Alain Duhamel

Alain Duhamel, éditorialiste à BFMTV, vit entre Paris et le Gard. Midi Libre – MICHAEL ESDOURRUBAILH

How did our politicians deal with the sensitive issue of the budget? ? Who was the best, or on the contrary the least reasonable? ? A journey through time with BFMTV columnist Alain Duhamel, a journalist who has known all the presidents of the Fifth Republic.

A colossal deficit, an exploding debt… has France ever experienced such a situation? ?

In 1958, when General de Gaulle came to power, it was quite comparable for the deficit, but the debt was not the same. He responded with the Pinay-Rueff plan, which was very vigorous and began with a fairly strong devaluation.

A weapon that governments no longer have today.

Yes, that should encourage a spirit of seriousness that is not always evident.

How has the budgetary situation evolved under the Fifth Republic, what were the key moments ?

The one who the most healthy financial situation of France is De Gaulle. Under Pompidou, the end was a little complicated by May 68, but it was still a very reasonable period.

It was very good up to and including Giscard, there were two oil crises, 14% inflation, but the debt remained sustainable.

Unemployment, on the other hand, was rising very quickly, as was the case during the big shock from 1981 to 1983, under Mitterrand, the economic situation was then very difficult, we even devalued three times.

That was the turning point of austerity.

Yes, it was intended to limit the damage, but it did not erase it.

Then there were the three financial crises under Sarkozy. He had nothing to do with it, they fell on him and he coped very well. That's what he did best.

Under Hollande, there was an unfortunate first phase, with a very harmful, ill-timed tax policy: suddenly increasing taxes produces perverse effects, it is very bad for consumption and therefore for growth and investment.

Sarkozy, two years before, had made the same mistake, that's what annoys me sometimes.

From 2016, Hollande led a much more reasonable policy, but the effects of which, in reality, mainly occurred when Macron was elected.

In the recent period, 2017 until the health crisis, we were on a reasonable slope. Covid was horribly expensive, now, some regret what was done because it was ruinous, but at the time, everyone was very happy, it is the country that was the most generous in maintaining 90% of salaries and supporting all businesses.

The industrial and economic recovery plan that followed was also very costly. Inflation has now returned to a perfectly acceptable level, but we have pursued a budgetary policy that is, let's say, short-termist, to be kind…

Do we find, in France's budgetary management, a real left-right dichotomy?? The right, traditionally, has adopted a more rigorous line on these issues. Has this been verified in the facts beyond the postures ?

The right is all for budgetary seriousness, but at the same time makes completely unreasonable spending proposals. They are serious about revenue, not about spending…

But I don't think Barnier will follow this path, we are in too delicate a situation.

The subject is already cracking the fragile coalition between the right and Macron's party. How was it understood during the period of cohabitation ?

During the first cohabitation, Mitterrand completely left the reins to Chirac who, thank God, completely left the reins to Balladur…

During the Mitterrand-Balladur period, there was a very realistic economic policy, Balladur knew exactly what he wanted to do, and Mitterrand, who was never passionate about the economy and was, moreover, very ill, did not seek to complicate things for him on this point. He let it happen and he did well.

Under Chirac-Jospin, growth was good thanks to the previous policy. But Dominique Strauss-Kahn was the most ingenious politician on these issues, both a very good technician and, which is very rare, truly imaginative.

But some decisions, notably the 35-hour week in hospitals, were costly and ineffective.

Human destinies sometimes weigh on France's budgetary policy. Dominique Strauss-Kahn got tangled up in the Sofitel affair on the way to the Elysée Palace. And François Fillon in his fictitious employment case, while he promised a policy of austerity, blood and tears. Would the situation have been different if he had been brought to power??

Fillon was practically powerless when he was Prime Minister, everything went through Sarkozy, so it's hard to know if he was competent and effective

We never noticed his mark, we can imagine that he would have led a reasonable policy, but we didn't have the opportunity to verify it…

“In all positions, we are on the brink of disaster in France”. This sentence is not by Michel Barnier, but by Charles de Gaulle, in 1958. It is still relevant today. Have we learned nothing from history??

This is not the area in which we are the most brilliant. That can be said over time… But there have still been periods of efficiency, sometimes competent leaders. But the issue of taxes has been the sore point each time. It is a French problem in reality. We have the most developed social protection system and therefore also excessive taxation to finance it.

But, in the current situation, we must increase taxes, not on workers, but on very large companies, very large assets. And there are savings to be made in some costly and inefficient niches, for example on research aid for very large companies.

But the French are quite contradictory, when asked if we should deal with the debt, they answer yes. When asked if we should pursue an austerity policy, they answer no…

We find ourselves today in a very difficult situation, with a budget deficit that is not sustainable in the long term, the gap in interest rates between France and Germany is widening, which shows international scepticism with regard to France's situation and the debt burden is becoming increasingly heavy. As long as the markets trust us and see us as a reasonable debtor, it's fine, but we will obviously have to make efforts.

If we pursue an intelligent policy, the deficit can be reduced to reasonable proportions, not in three years, as Le Maire claims, but in five years and this can be negotiated with Brussels, since this scenario is planned.

We don't really have a choice today, we shouldn't tell ourselves stories, the situation implies years of austerity. But that doesn't mean masochism either!

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