France's debt in 2014 to hit €2,000,000,000,000
AFP/The Local · 17 Sep 2013, 13:17
Published: 17 Sep 2013 13:17 GMT+02:00
- Updated: France set for €15billion budget cuts (11 Sep 13)
- OECD forecast backs up France's return to growth (03 Sep 13)
- Tax rises in France have reached a 'critical level' (26 Aug 13)
France's public debt was expected to hit nearly €2 trillion ($2.7 trillion) by the end of 2014, or 95.1 percent of GDP, far higher than previous government estimates, the Le Figaro daily reported Tuesday.
The revelation came as France's public auditor warned that the "spiral of social debt" -- referring to the country's generous healthcare, family and pension schemes, which contribute to its overspending -- was "abnormal and particularly dangerous."
Previously, the government had said France's overall public debt would stand at 94.3 percent of gross domestic product (GDP) next year.
French Finance Minister Pierre Moscovici did not reject the new figure when asked about it on France 2 television Tuesday, admitting public debt would reach "maximum" levels in 2014 before coming back down.
At the end of 2012, the debt amounted to 90.2 percent of GDP, and the new figure will be a rise of more than 120 billion euros over two years, according to Le Figaro's report.
European Union rules require public debt to be no more than 60 percent of GDP or falling towards this ratio.
Adding to concerns, Didier Migaud, president of the Cour des Comptes - France's public auditor - said Tuesday that the current financial state of the country's generous healthcare system was "worrying".
The system is haemorrhaging money, with a deficit expected to hit nearly eight billion euros this year.
This "maintains a particularly abnormal and particularly dangerous spiral of social debt," Migaud said as he unveiled an annual report on the state of France's social security system.
The country's heavy debt load has caused concern that financial markets could turn against France, but that has yet to happen.
France's borrowing prices are quite reasonable and have even hit record lows in the past two years.
In his interview, Moscovici insisted that France's credibility on the debt market was not under threat, saying the government was implementing reforms "that allow for the primary deficit to fall."
He said the primary deficit - which does not include interest payments on debt - was going to fall slightly in 2014 from this year's 1.7 percent of GDP.
Meanwhile, France's overall public deficit in 2013 is due to come in at 4.1 percent of GDP, higher than the 3.9 percent agreed with the EU, and will come in at 3.6 percent next year.
But Moscovici has vowed Paris will meet its 2015 EU-mandated deadline to bring the deficit below three percent.