Worse and worse for Macron! France faces astronomical debt – 113.5% of GDP

COP26: Emmanuel Macron meets Boris Johnson in Glasgow

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Having been shunned by British Prime Minister Boris Johnson at the COP26 meeting, when Mr Macron’s request for a face to face meeting was turned down, the French premier is facing criticism as he returns home from an unremarkable summit. Already French fishermen are furious at Macron’s handling of the so-called “fishing war” after the French failed to secure fishing licences to enter British waters.

Mr Johnson publicly slapped down claims Britain was ready to fold and give more access to our waters, stating: “Since you ask about whether the UK has changed its position on the fishing issue, the answer is no.”

The diplomatic temper tantrum, already dubbed “Le Strop”, came as the UK made plans to strip France of its status as Europe’s £120bn trade gateway to Britain over Mr Macron’s fishing wars sabre-rattling.

With pressure mounting at home, the debt will be a burden on Mr Macron’s shoulders as an upcoming election fast approaches.

With COVID-19 having played an important factor in the decline of the French economy, some reports suggest the debt could have been worse.

This is enough to “start the debt reduction path, particularly on the debt linked to Covid-19, estimated at 165 billion euros”, announced Olivier Dussopt, Minister of Public Accounts.

In an interview with Les Echos, the minister forecasts “a public debt of 115.3 percent of GDP at the end of 2021, whereas we were initially expecting 118 percent; and 113.5 percent in 2022, compared to the previous prediction of 116 percent.”

The level of public debt in France increased by almost 20 percentage points during the year 2020 to about 120 percent of GDP.

Public debt is high in many countries, at levels never before reached almost everywhere.

This is not inevitable, since some countries are not in debt, especially Germany.

But if the debt is almost everywhere at its highest, the interest burden is almost everywhere at its lowest.

In France, you have to go back to 1980 to find an interest burden as low as it is today.

In 1980, the public debt was 20 percent of GDP, before 1980, as far back as the national accounts published by France (1949), the interest burden represented on average 1 point of GDP, not far from the current low point.

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Aiming to make his presidential bid more solid, Mr Macron has announced plans to boost the French economy.

Six months before the presidential election, Mr Macron has launched the “France 2030,” €30 billion investment plan aimed at reindustrializing the country after the coronavirus crisis.

The package will pour public money into the nuclear industry and a variety of other sectors ranging from electric cars to agriculture, from space to biotechnology, and into cultural content such as TV programs.

Making France less reliant on foreign imports is the axis of the plan.

Speaking of the importance of the scheme, he said: “The key to all this is our independence.”

With competition for the Presidency potentially at its hottest since taking charge, far-right leader Marine le Pen was critical of Mr Macrons plans.

“A few months before the end of his mandate, the outgoing president uses the money of the French people to burnish his electoral image with promises that only bind his successor,” said the leader of the National Rally party.

Also hoping to make the French nation great again, undeclared runner Eric Zemmour has been declared the “French Trump” posing more pressure on Mr Macron to win the election.

Additional reporting by Maria Ortega

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