The “whatever it costs” of the French government has cost the State funds dearly: more than 400 billion euros, according to estimates, between partial unemployment covered at 100%, aid to companies, funds of solidarity … And to all this must be added the expenditure on health which has exploded. To pay all this, it is the debt that has been mobilized… and as its name suggests, it will have to be repaid.
Debt explodes: 118% of GDP in 2021 for France
The massive expenditure linked to the health crisis will further increase the French public debt for a few years: at the end of 2021, it should stand at 118% of GDP, and could rise further in 20222 or even 2023. Uncertain forecasts: Growth is relatively difficult to establish and the pandemic is unresolved, raising the risk of another outbreak of cases at any time.
A problem, for the firm Euler Hermes which publishes, on May 20, 2021, an analysis of the debt in the European Union and an estimate of the time necessary to repay it. ” Unless France succeeds in significantly boosting its level of GDP growth and / or improving its primary budget balance, she will essentially stand still in terms of reducing her debt burden from Covid-19 », Writes the cabinet.
However, we already know what the Macron government plans to do: rely only on growth and consumption. Despite calls from all sides to raise taxes for the richest, the big winners of the pandemic, the government has always claimed that it will not increase taxes, even in a targeted and temporary manner.
Debt repayment: 67 years for France, 7 years for Germany
If the government does not change its tax policy, and if growth does not explode, then for Euler Hermes it is simple: the burden of Covid debt will weigh more than half a century on public finances. France would take 67 years, according to its estimates, to repay its debt … The repayment will therefore be completed in 2088.
France is doing a little better than Spain, for which Euler Hermes announces a repayment term of 89 years, but much less than two other of its European neighbors. Italy, for example, would only take 26 years to pay off its Covid debt while Germany will have repaid it in 7 years, or in 2028-2029.