“Debt is not a taboo”

“The quality of public spending and debt sustainability will be among the major economic and political subjects of the coming years”, believes Pierre Moscovici, head of the Court of Auditors since June. The former European Commissioner and former Minister of the Economy (2012-2014) of François Hollande speaks on the occasion of a report “for a reform of the organic framework and the governance of public finances”, published Wednesday 18 November.

Your report once again warns of the drift in public accounts. In these times of epidemic when public spending must save the economy, isn’t your warning coming off the mark?

This is not my opinion. The democratic debate on public finances is essential and the role of the Court of Auditors, an impartial and independent institution, is to inform this debate. We are living in an extraordinary period, where profound changes are taking place. Public debt is unlikely to drop below 100% of GDP in the next ten years, nor the public deficit below 3% within five years – and these are rather optimistic forecasts. We must therefore invent new software.

The Court does not question the expenditure deployed to deal with this crisis: the priority is economic, social and environmental recovery. But when you spend a lot of money, you have to make sure that you spend it well. We need more than ever to work on the quality of public spending, debt sustainability, and the management of public finances. This is the subject of this report. We are therefore right on time!

Read also Covid-19: “The urgency of the crisis and the electoral deadlines pollute the long-term visions of the executive”

Can the Court still be audible on the dangers of too high a debt at a time of “whatever the cost”?

Yes, although the landscape has changed dramatically. In the past, we reasoned in a universe of high interest rates, where the Covid did not exist, where the European Union remained very strict and European monetary policy excessively cautious. We are no longer there, which implies reviewing our doctrine. The Court does not preach austerity, which weakens public power, but seriousness. For me, public spending is not an enemy, the deficit is not a totem, the debt is not a taboo. But a public expenditure representing 64% of the GDP or a debt at 120 points of GDP is considerable and it cannot last indefinitely. The French understand this very well: it is their money, their taxes, it is the future of their children. They are happy to benefit from public spending, but they also want public money to be well spent.

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