Report
The only way to actually improve France’s public finances is to increase the employment rate
France’s fiscal deficit will be significantly higher than expected in 2022 due to the consequences of the war in Ukraine. The fiscal deficit will then have to be reduced, either because European fiscal rules will be re-established or because interest rates will rise again due to high inflation. How to significantly reduce the fiscal deficit? An increase in the tax burden is difficult to use in a country where it is already very high; An increase in the retirement age will have a significant, but slow, effect on the fiscal deficit; Even a significant reduction (100,000, 200,000) in the number of civil servants would have only a small effect; The most effective policy is clearly to increase the employment rate (through policies of education, training and upskilling), which potentially has a considerable effect on tax revenues.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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