Tuesday, February 23, 2021

French ways to get into debt: Postpone, cancel, pay off immediately


These are three variants of ideas about France’s galloping debt. Representatives of various political groups on the Seine have expressed their views on this subject.

Public debt in France is estimated at EUR 150 billion. In 2021, this will account for 122.4 percent of the national income. This apocalyptic sum is a consequence of the costs resulting from the pandemic lasting in France since March last year and related restrictions – quarantines, curfew, restrictions on trade, tourism, gastronomy, as well as treatment costs. In the hotel industry alone, revenues fell by 74 percent.

Some hotel owners try to rent them for office space, but this is a negligible minority. According to official data, most of the 18,000 French hotels that employ over 20,000 people are on the verge of bankruptcy. Also, not all restaurants can be saved by selling to go. Meanwhile, there are more sectors of the economy in France which urgently require state aid.

This position is represented by the extreme left, headed by Jean-Luc Melanchon and the communist leader Fabien Roussel. They argue that such a step “would not cost a single euro”. Socialist representatives Benoit Hamon and Arnaud Montebourg are of a similar opinion. Hamon says that “the banks are well aware that the debt will never be paid”.

Montebourg, who puts forward arguments of a “humanitarian” nature, points out that “it is humanly impracticable to pay off debt.” In turn, one of the leading figures in the environmental movement, Yannick Jadot, believes that “with current interest rates, the debate about paying off the debt is out of place and out of time.” There is also a widespread perception within his group that “debt is not a problem.”

Among the supporters of this option, the activist of the socialist party and the mayor of Paris, Anne Hidalgo, who is in favor of paying off the debt, but “divided into long-term installments”. Francois Bayrou, the leader of the centrists, the Modem party, proposes very specific solutions.

In his opinion, ten years should be given for the economy to recover from the shock it is in as a result of the pandemic. “And then you have to pay off the debt by spreading it over, say, 30 to 50 years,” Bayrou said.

The representative of the opposition right-wing Republican party, Guillaume Peltier, argues that “public money must be separated from the rest of the budget, and thus debt becomes a permanent, long-term phenomenon.” However, he too is a supporter of debt repayment.

His party colleague, former Economy Minister Francois Baroin, supports Peltier’s position, who explains that he is in favor of such a solution because the debt resulting from the pandemic is “a war debt”. Jordan Bardella, an extreme-right activist of the former National Front, the National Union, also considers the right and logical spread of this process over many years.

Settle your tax return now – do not wait until the last minute

President Emmanuel Macron, head of the Jean Castex government, but also a charismatic republican activist, Valerie Pecresse, president of the Ile-de-France capital region, undoubtedly support such a solution.

According to Macron, “the debt will be gradually repaid by the largest multinationals as a result of the European taxation system, which we will gradually implement”.

Prime Minister Castex summed up the problem succinctly but firmly – “we will pay off this debt”. On the other hand, Valerie Pecresse emphasizes that “it would be self-deception to believe that a debt could be crossed out with the stroke of a pen. Gerard Larcher – Senate speaker, Eric Woerth, chairman of the finance committee in the National Assembly, and Bruno Retailleau, who heads the Republican club in the Senate, also believe that debt repayment is absolutely necessary.

In turn, the French media asks a rhetorical question, who is to be involved in paying off the debt, or, as Emmanuel Macron wants, large concerns or the whole society? The authorities firmly assured that “this burden will not fall on the shoulders of the taxpayers.”

Polish editorial office of Deutsche Welle





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