France: Can problems be solved by using fiscal deficits?

In France, the idea that increasing fiscal deficits could help solve problems is gaining traction . The fiscal deficit will be around 3.2% of GDP in 2019, versus 2.5% in 2018, and this fiscal expansion policy has received support in recent economic literature: Olivier Blanchard has put forward the idea of an expansionary fiscal policy since interest rates are low; supporters of modern monetary theory call for a considerable fiscal deficit financed by money creation. But what are France’s key problems? Low labour force skills, poor quality of the education system, weak corporate modernisation. But increas ing the fiscal deficit would not solve these problems: public spending on the labour market and on education are already high, the level of French corporate investment is high, but its quality is low , tax cut s cannot correct a cost competitiveness disadvantage . The solution is better organisation of the training and education system, improved sophistication in companies, not a fiscal deficit, especially if it finances transfer payments to households and consumption.