Thursday, June 27, 2013
Austerity à la française
The Cour des Comptes has called on the government to reduce expenditures by about 1.25% of GDP over the next two years. In the view of the Cour, the tax increases that reduced France's deficit by 1.1% of GDP since Hollande's election have gone as far as they can, since the share of GDP claimed by all taxes and other charges is now at a historical high. Further progress toward the government's proclaimed deficit goal must therefore come on the spending side of the budget. So far, there is little reaction from the government.