France’s latest fiscal trade-off

France’s deficit is set to reach 9.4 per cent of GDP this year, more than last year, even though France’s first lockdown was more severe and lasted for a longer time. This may relate to accounting issues, as some spending is only reported this year even if it is related to last year. But these are details – the main issue is something else entirely. The journalist Dominique Seux wonders whether France has maxed out its spending capacity at the moment when environmental challenges require extraordinary efforts. Were France’s spending choices last year done with full awareness of how they would compromise future fiscal room for manoeuvre?

France was always amongst the high deficit countries in the EU. There was always a reason to justify its higher-than-expected deficits: the economic situation, social tensions and the forever promise of investment into the future. But this fiscal version of whatever-it-takes comes back to bite just as climate change requires more funds.