“The debt burden has fallen by the wayside as if it had become impossible to put it back in the public debate”

AThen everyone is healing their wounds after the harsh conflict that has just shaken the country, a corner of the veil is lifted on the unsaid which, from January to April, accompanied the painful pension reform. France drags behind it the burden of its public debt: almost 3,000 billion euros accumulated over fifty years, i.e. 111.6% of gross domestic product (GDP) at the end of 2022.

As long as she could repay it by getting back into debt at a lower cost, she emerged carefree and a winner. The 2010 decade was the blessed era of free money, marked by very low interest rates, sometimes zero. But when the situation began to turn around in 2021, when interest rates started to rise, when the debt burden increased, the cicadas had less reason to sing.

This is what the rating agency Fitch Ratings acted on Friday, April 28, by downgrading the sovereign rating of French debt from AA to AA− with a stable outlook. In the short term, this deterioration had no impact on the amount of interest rates, but, boosted since the health crisis by the “whatever the cost” policy, the country suddenly rediscovered its fragility. The next appointment is set for June 2, when another rating agency, Standard & Poor’s, will make its decision on the French debt, which it now rates AA with a negative outlook.

The government’s decision to extend the retirement age by two years is part of this economic downturn which is pushing the rulers of the European Union (EU) to gradually regain control of their public accounts. It is not said that a better pedagogy around the debt would have facilitated the gradual p***age to 64 years, but the fact is that it has totally failed, to the point of astonishing François Bayrou, the boss of the MoDem, who continues to publicly blame Emmanuel Macron.

Why on earth did the President of the Republic not sound the tocsin during the presidential campaign, or even afterwards, when he granted three months to his Prime Minister, Elisabeth Borne, to develop consultation with the unions before to set in motion the reform? The message from the Elysée throughout this period was intended to be positive and mobilizing. It focused exclusively on the increase in the volume of work expected from the reform to boost growth and thus enable the country to finance its priorities. That of Matignon was more social. It emphasized the sustainability of the pay-as-you-go pension system in a spirit of “justice, balance, progress”.

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