European austerity or the French social welfare model? Where is France going with its contradictory desires and a record national debt above two thousand billion euros?
The debt is double what it was a decade ago. It is now within five percent of the total national income.
In part, living in debt pays for the progressive social model so cherished by the French. And the government is letting the debt grow with its 2015 budget — just unveiled. That is even as the state embarks on a 50-billion euro spending diet over three years.
The French are worried how that trimming will affect their health system, education, pensions and employment protection and family benefits.
Eager to avoid outright budget austerity, the government is loathe to make unpopular cutbacks and has so far largely focused its belt-tightening on limiting public spending growth to the rate of inflation.
The political fallout from the debate saw anti-austerity Arnaud Montebourg replaced in August by the liberal Emmanuel Macron as Minister for the Economy.
Defending the French social model has long been the battle cry of French governments but it has become the François Hollande government’s nightmare.
Prime Minister (since March) Manuel Valls insists that the euro zone’s second largest economy (after Germany) will now tackle its problems head-on. Valls has won two confidence votes in the Assemblée Nationale.
Valls said: “The members of Parliament have decided we will carry our plan to term because this is what the French people want: that we get back to work and that we rise to meet the challenges ahead of us. I thank you for your trust; I will not disappoint you, but will serve France and the French people.”
Paris is pushing European Union deficit targets off for another two years saying this is justified if France is to avoid slipping into a recession that could weigh on a European recovery.
The government said it is being fiscally responsible, rejects austerity and will not demand further effort of the French.