Depuis trente ans, la France n'a pas su gérer ses finances publiques. Le ratio de dette n'a presque jamais cessé d'augmenter, la politique budgétaire a souvent été à contretemps de la stabilisation conjoncturelle et le pays a gaspillé sa crédibilité vis-à-vis de ses partenaires à force d'engagements non tenus. L'échéance cependant est venue et la prochaine élection présidentielle sera dominée par la question budgétaire. Pour deux raisons, interne et externe. La première est que, pour reprendre la maîtrise de ses finances publiques, la France va devoir dès la prochaine mandature procéder à un ajustement sans précédent de l'ordre de 4 points de PIB (80 milliards). La deuxième est qu'à la demande des pays créanciers, qui ne veulent plus tolérer les déficits permanents… Read more
Bruegel blog
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Finances publiques: Le vrai débat
4th May 2011
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French public finances: Time for change
4th May 2011
For the past thirty years, France has consistently failed to manage its public finances. The debt-to-GDP ratio has inched upwards year after year, budgetary policies have been unfailingly pro-cyclical, and the country has squandered most of its credibility with EU partners because of repeatedly unkept promises. The time, however, has now come and budgetary issues will take centre-stage in the next presidential elections. The reasons for this are twofold. The first is that, in order to regain control of its finances, France will have to carry out unprecedented budgetary adjustments – to the tune of 4% of GDP (80 billion euros) over five years. The second reason is that France’s external creditors will no longer tolerate recurrent deficits, and the… Read more
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Comment discipliner les finances publiques ?
17th April 2011
Un débat s’est ouvert sur les leçons à tirer des crises de dette au sein de la zone euro. Pour certains, l’affaire est entendue : il faut renforcer les sanctions, et les rendre automatiques. Pourtant l’échec du Pacte de stabilité n’est pas seulement celui des procédures et sanctions européennes. C’est d’abord le résultat d’un défaut de conception et d’un manque d’appropriation des disciplines européennes par la plupart des États. Le Pacte n’aura représenté qu’un garde-fou, une barrière européenne de plus, négligée par la plupart. Beaucoup d’États se sont achetés un certificat a minima de santé de leurs finances publiques, mais ne se sont pas saisis du Pacte pour assurer la viabilité de long terme de leurs finances publiques. La donne… Read more
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The weak power syndrome
4th April 2011
This piece is part of “The Euro, the investors and the governance”, a volume presented at the event “Proceedings of the seminar in honour of Tommaso Padoa-Schioppa” in Brussels on 4th April 2011 In his last book, entitled Against the Short View, Tommaso Padoa-Schioppa tells us that we should make a distinction between weak power and limited power: “Weak power is power which lacks the tools necessary for it to act in its sphere of authority. Limited power is power whose sphere of authority is limited. Power must be limited, but it must not be weak”. This distinction, so simple yet so powerful, prompted Tommaso to stress that the EU would be complete not because it had been endowed with… Read more
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Is it EMU 2.0 or 1.7.3?
24th March 2011
For a year European policymakers have been busy fixing bugs in the design of Economic and Monetary Union. As with defective software, successive new versions of EMU have been introduced at a frantic pace – only to discover remaining vulnerabilities shortly afterwards. In spite of last-minute hiccups and disagreements over details, they claim this time to have come up with an enhanced, bug-free new version – a sort of ‘EMU 2.0’. Can we now trust it?The starting point for a review is where troubles came from: the crisis prevention regime. Before 2010, it was almost entirely based on the surveillance of budgetary deficits within the framework of the Stability and Growth Pact (there was also a procedure for economic surveillance,… Read more
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Arab spring: Echoes of 1989
22nd March 2011
In 1989 the wall separating the two halves of Europe suddenly collapsed. Within the space of a few months, a hitherto seemingly immutable order gave way to commotion and impatience. One moment the old countries of Europe were paralysed with fear of the unknown and anxiety about immigration, the next they had seized the opportunity which history was offering them. They implemented aid programmes, opened trade talks and promised enlargement. Two decades later, success has proved spectacular. The economic and political transition of former eastern Europe has been swift and deep, it has – with the dramatic exception of Yugoslavia – been peaceful, and it has yielded development. Could a similar – obviously not identical – story unfold for the… Read more
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Half empty, half full
22nd February 2011
G20: The glass is half-empty (Jean Pisani-Ferry)At the end of a long sleepless night, the G20 ministers on Saturday agreed on a list of indicators they intend to monitor in order to “maintain current account imbalances at sustainable level”. These are “(i) public debt and fiscal deficits; and private savings rate and private debt (ii) and the external imbalance composed of the trade balance and net investment income flows and transfers, taking due consideration of exchange rate, fiscal, monetary and other policies”. Syntactic puzzles apart, this sounds as a very straightforward list of indicators – in some respects as mere accounting. But there are three reasons to worry.First, long and painful negotiations were necessary to agree on this list, as… Read more
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Europe needs a growth strategy
7th December 2010
In this piece, Jean Pisani-Ferry writes that there are several reasons why markets have reacted poorly to Europes recent crisis management efforts. Europes response to date has been more innovative and effective than many of its critics realise. But it now must accept that what was once a crisis in the eurozone, is now a crisis of the euro itself. The European Union cannot afford doubts about the viability of the euro to spread and strengthen. A revitalisation programme should involve a strengthening of integration within the single market, particularly in the market for services, to help Europes economies converge. A bolder, more comprehensive response is urgently needed. There are several reasons why markets have reacted poorly to Europe’s recent… Read more
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Crise de l'euro: sortir du déni
3rd December 2010
In this article, Jean Pisani-Ferry reviews the most recent developments in the European debt crisis and sheds some light on the reasons for which markets greeted the Irish bailout with lukewarm enthusiasm. Increased tensions and the threat of contagion mean that it is no longer possible to ignore and delay answering some of the challenges facing Europe. How did we reach this situation? Why didn't the latest announcements convince the markets? Is the euro area still viable? What can be done today? Le printemps avait été affreux, mais l'automne est pire. Le retour de fortes tensions à l’intérieur de la zone euro et la réaction du marché à l’annonce plan de soutien à l'Irlande ne permettent plus de repousser les questions… Read more
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Wie die Euro-Zone ihre Schulden bewältigen kann
16th November 2010
In this piece, Jean Pisani-Ferry and André Sapir talk about a recently proposed initiative - the European Crisis Resolution Mechanism (ECRM). They argue that the ECRM would ensure that the transformation of the European Financial Stability Facility (EFSF) into a permanent European instrument respects the two requirements agreed at the recent Franco-German and European summits: very strong conditionality for loans to solvent countries and private sector involvement for countries with unsustainable debts. Last May, at the height of the sovereign debt crisis, euro area leaders set up a temporary rescue fund for countries in difficulty, the European Financial Stability Facility (EFSF). No country has yet requested help from the EFSF, but there is persistent rumour that Ireland is about to… Read more