France’s top ministers have reaffirmed the country’s promise to cut debt after the Covid-19 pandemic forced President Emanuel Macron to make unprecedented spending to prevent the economy from collapsing, according to Bloomberg.
“I will be a relentless craftsman in maintaining our public accounts in a context that we know is difficult,” Gabriel Attal, France’s new budget minister, said in a speech in Paris today. France must “stay on the path” of debt reduction, because it is “vital to the stability of our economy, the confidence in our country and the future of our new generations.”
When Macron first took office in 2017, he sought to use technical austerity to reduce the economy’s dependence on lending and to relax the rules that restrict business. But the pandemic forced him to change course and adopt a “whatever it costs” approach. The ministers of his new government will have to walk a fine line, as they will try to reduce public spending, while at the same time trying to reduce the impact of the cost-of-living crisis.
Purchasing power was in the spotlight during the presidential campaign and will remain a key issue in next month’s parliamentary elections, as inflation in France continues to skyrocket. The previous president’s government had already pledged about 25 billion euros ($ 26.4 billion) this year for measures to curb energy prices. Now the cost of the new debt will rise as the European Central Bank begins to raise interest rates.
Energy prices
“My second commitment will be to fight for every euro in the French wallet,” said Attal, who previously served as government spokesman, during Saturday’s ceremony. “We will take urgent action, especially on fuel and energy prices, and this will be our first challenge.”
Speaking at the same ceremony was Economy and Finance Minister Bruno Le Maire, who was confirmed in office on Friday, and stressed that keeping public accounts under control would be one of his top priorities as he fights inflation.
Le Maire has pledged to take action to protect against price spikes, while keeping its commitment to reducing the deficit. From Monday, he will be meeting with key French economists, including the Medef business federation, to see what scope there is for boosting wages and curbing some price increases.
“I want to be clear,” Le Maire said. “In order to achieve effective protection of our compatriots, everyone must take part in the fight against inflation,” he said.
The Treasury Department has already prepared a revised budget with a series of measures to meet promises made by Macron during his re-election campaign, such as increasing social benefits and food stamps for poorer households. It will be presented to parliament after the second round of parliamentary elections on June 19th.
Source: Capital
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