ABSTRACT

This chapter focuses on the specificities of French debt and deficits, and will seek to explain why France accumulated deficits during the last three decades and why such deficits make debt stabilization so difficult today. It first, describes the situation in France by exploring the dependent variables. It then focuses on the causal mechanisms that explain the current situation in French public finances. The topic of consolidation has appeared in the public debate only since the mid-2000s, and it imposed itself very late in 2011 due to the threat of a systemic crisis in the eurozone. The rare examples of fiscal consolidations implemented in France happened in the context of slow growth and were only modest successes obtained at a high price in terms of economic activity and employment. Thus, France finds it difficult to fulfill its European commitments and to stick to its own forecasts to balance its budget.