Things are hanging together by a thread for Socialist President Francois Hollande over in France — and even just a thread might be a tad too generous. He’s been in office for barely a year, during which time his popularity has plummeted as unemployment hovers around 11 percent and the economy lingers in recession territory (the government has optimistically predicted a whopping 0.1 percent growth rate for the year, but we all know how those predictions go).
Earlier this year, the EU extended France’s deadline by which they need to bring their public deficit below three percent of GDP by two years, but France’s public-sector spending currently accounts for 56 percent of their GDP and suggestions for reform are not going over at well with much of the French populace. Hollande’s government is looking to state and local authority budgets as one of their biggest means of reducing the deficit, but France’s national auditor recently warned that that’s not going to be enough to get them back on track — not nearly enough. Via the BBC:
The Cour des Comptes said the deficit is on course to exceed the government’s 3.7% target due to lower tax receipts.
A cut in the “weight of public spending seems more necessary than ever”, the quasi-judicial body said in a report. …
“(France’s) deficits remain higher than the eurozone and European Union average. There must be no slackening in this effort and the focus from now on must be on spending,” the body said.
Trimming state aid and local authority budgets “can only be temporary,” the auditor said.
It added: “Structural reforms must be put in place from today to ensure the lasting recovery of public finances.”
No kidding. All of the soak-the-rich and pitiful stopgap measures the government is flirting with, instead of attempting a real, substantive overhaul of their bloated state bureaucracy and unsustainable budgets, are never going to be enough — and their economy will keep suffering until they figure that out.