International Monetary Fund calls for France to put an end to “whatever it costs”

The Washington Institution urges France to better target aid in the face of the energy crisis and to accelerate the pace of reduction in public spending.

by Elsa Conesa and Julien Bouissou

“The reduction of the deficit should not be a source of concern as long as the crisis persists,” said the International Monetary Fund (IMF) in 2020, in the middle of the world pandemic of COVVI-19. Two years later, while the war in Ukraine slowed down the recovery, exploded the energy prices and dug the deficits a little more, the international organization located in Washington adopted a much less complacent speech, in particular vis- à-Vis de la France. In his annual report devoted to France, published on Monday, November 21, the IMF addresses him a barely veiled warning, calling on him to accelerate the pace of reduction of his public spending and exhorting him to reserve for the most fragile his measures as Support for the energy crisis.

“We supported” whatever it costs “, but it is time” to put an end to it, estimated, during a press conference, Jeffrey Franks, head of mission of the IMF for the France, by presenting the conclusions of the mission which, each year, reviews the economic, budgetary and financial situation of France, as provided for in article IV of the statutes of the international organization.

The message sounds like a reminder to order, while the executive is preparing to unlock an additional fifty billion euros to indiscriminately support households and businesses in 2023, as part of the current budget examination in parliament, and while rates go up.

He also contrasts with the recommendations addressed to Germany in July. The IMF then judged the country’s budgetary orientation for 2022 “appropriate”, and even urged Berlin “to overcome long -standing obstacles to the rapid and decisive increase in public investment.” Germany has since announced a package of 200 billion euros to help households and businesses faced with energy prices inflation.

France did not, in fact, approached the energy crisis with finances in the same state as those of its neighbor. It has nevertheless mobilized considerable sums (more than 100 billion euros since the fall of 2021, in total) to absorb most of the increase for households. This allowed it to contain the evolution of inflation at a level lower than that of other European countries, admits the IMF. But at the cost of a massive increase in expenses, which came to be added to the hundreds of billions already disbursed to support the economy penalized by the COVID-19, and supplying a new “whatever it costs”.

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/Media reports cited above.