“These figures are being published now to cause alarm”: Eric Coquerel reacts to the slippage in public accounts announced by Bercy

Eric Coquerel, head of the Finance Committee. MAXPPP – Vincent Isore

In a note sent to the parliamentarians of the Finance Committees in the National Assembly and the Senate, Bruno Le Maire and Thomas Cazenave warned of a possible increase in the public accounts deficit to 5.6% of GDP in 2024, attributing this new slippage to lower tax revenues and especially to the increase in local authority spending. Éric Coquerel (LFI), chairman of the Finance Committee of the National Assembly, reacts. Interview.

Bercy is sounding the alarm about the deficit that risks slipping to 5.6% of GDP. This is serious?

I note that they have had these figures since July. They are being published now to cause alarm. This is pressure being put on those who will be appointed to Bercy.

The message is clear. Emmanuel Macron wants to continue the policy planned through an economy of 15 billion in 2025 and even amplify it in 2024 since Bruno Le Maire suggests canceling all the budgetary aid that had been planned, i.e. 16.5 billion.

This represents a reduction in budgets of 26 billion in 2024. This is the message sent.

From your point of view, the situation is not so serious ? Aren't savings necessary ?

From my point of view, the remedies provided will only make the situation worse. The future government will further reduce public spending, which has been done for years, but every year we learn that the deficits are larger than expected.

This is proof that it doesn't work. What explains the increase in deficits is the lack of revenue.

Bercy is indeed concerned about the risk created by tax revenues lower than forecasts… How do you explain this ?

When you have less economic activity than the previous year with companies closing down, you have a de facto drop in tax revenues. And when inflation falls, you have a drop in VAT.

Furthermore, if there is less public spending, there is less tax revenue. And since they want to make this policy worse by continuing to cut public spending even further, this risks having a recessive effect on the economy.

Bercy also accuses local authorities of having spent too much…

They have a good excuse, especially since Bercy is using an inaccurate term since local authorities do not have the right to run deficits. Of course, the expenses were greater than Bercy had imagined and so they drew on their savings.

But the State is not going to compensate.

The national economy is not doing very well either, the political instability in our country since June is contributing to this ?

Undoubtedly this has made things worse. This has panicked the markets and contributed to the decline in economic activity, but above all the solutions provided by Europe, which consist of reducing public spending, only make the problem worse.

There are risks in terms of a decline in purchasing power, in terms of a decline in consumption and a decline in economic activity.

Instability contributes to this, and that is more serious than knowing whether we have a 5.6% deficit.

So you are advocating an increase in spending, how could that not worsen the deficit??

We will not do worse than them in terms of deficit because all the spending that we would like to undertake will be secured by revenue. Over 3 years, we have planned 150 billion more in spending and 150 billion more in revenue.

But what is interesting in our policy of recovery by demand is the multiplier effect that it produces in economic activity. This will provide room for maneuver to invest more and reduce deficits.

Will the Prime Minister who is to be appointed soon still be able to modify the budget ?

Yes, but I think that the condition set by Emmanuel Macron for appointing the future Prime Minister is precisely that he does not change Emmanuel Macron's macroeconomic logic.

What is expected is that he reduces public spending even more. As early as next week, I have scheduled a meeting in the Finance Committee to discuss the budget and I have also asked that we relaunch the National Assembly's dialogues on taxation to have discussions on what could be agreed upon within the Assembly.

We have also requested an extraordinary session so that the government can put the repeal of the pension reform on the agenda as early as September.

You would not vote for a budget that complies with what has already been planned on government ?

No of course but my hope is that my committee will amend the budget considerably and that the government will be obliged either to accept it or to make a 49.3.

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