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Documents de travail du Département des Affaires économiques de l'OCDE

Documents de travail du Département des affaires économiques de l’OCDE recouvrant toutes les activités de ce département : conjoncture économique, analyse politique et projections ; politique fiscale, dépenses publiques et fiscalité ; questions structurelles dont le vieillissement, la croissance et la productivité, la migration, l’environnement, le capital humain, le logement, les échanges et les investissements, les marchés de l’emploi, la réforme réglementaire, la concurrence, la santé et d’autres thèmes.

Anglais, Français

Bringing French Public Debt Down

The Options for Fiscal Consolidation

France has a track record of persistent general government deficits, partly reflecting pro-cyclical fiscal policies in upswings. This has resulted in a quadrupling of its public debt-to-GDP ratio since the 1970s to above 80% of GDP. Reducing public debt is crucial because a high level of public debt may hamper long-term growth and may have a direct impact on fiscal sustainability if long-term interest rates rise. Bringing back public debt to 60% of GDP even by 2030 would require a fiscal effort of 4 to 5 percentage points of GDP (under the assumption of unchanged long-term rates), implying permanent primary general government surpluses, which is very ambitious in view of French fiscal history since 1970. The government?s consolidation programme, which is aimed at reducing the general government deficit to 3% of GDP by 2013, represents around two-thirds of this effort. This study analyses how fiscal governance could be improved by the creation of a structural deficit rule and looks at ways the public deficit could be lowered. With France already having a very large public sector, most of the effort should be borne by holding down spending. Better control of the public wage bill, increasing public-sector efficiency and tackling age-related costs are the obvious candidates to contain expenditure. On the revenue side, there is significant potential for cutting tax expenditures. Furthermore, eliminating distortions in the tax base would encourage economic growth.

Anglais Français

Mots-clés: tax revenues, fiscal council, public debt, general government deficit, healthcare, local governments, structural deficit, government spending, pension system, tax expenditure, fiscal rule
JEL: H21: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Efficiency; Optimal Taxation; H63: Public Economics / National Budget, Deficit, and Debt / National Debt; Debt Management; Sovereign Debt; H19: Public Economics / Structure and Scope of Government / Structure and Scope of Government: Other; H51: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Health; H25: Public Economics / Taxation, Subsidies, and Revenue / Business Taxes and Subsidies including sales and value-added (VAT); H71: Public Economics / State and Local Government; Intergovernmental Relations / State and Local Taxation, Subsidies, and Revenue; H62: Public Economics / National Budget, Deficit, and Debt / National Deficit; Surplus; H24: Public Economics / Taxation, Subsidies, and Revenue / Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes; H23: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies; H55: Public Economics / National Government Expenditures and Related Policies / Social Security and Public Pensions; H54: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock; H72: Public Economics / State and Local Government; Intergovernmental Relations / State and Local Budget and Expenditures
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