France Faces IMF Pressure Over Welfare Spending
France's state audit office, the Court of Auditors, has issued a stark warning regarding the country's welfare spending, projecting an impending 'liquidity crisis.'The auditors' report reviewed by Politico indicates that welfare expenditures are 'out of control' and could leave France running out of money as early as 2027.'We need to take back control. Over the past years, especially in 2023 and 2024, we have lost control of our public finances,' the court's president, Pierre Moscovici, said in an interview with RTL.
The government forecasts a social budget deficit of €15.3 billion for 2024, expected to escalate to €22.1 billion in 2025. However, the Court of Auditors deems even this substantial projection overly optimistic, citing the government's overestimation of economic growth and the impact of tax cuts.
Pierre Moscovici, president of the Court of Auditors, emphasized the urgency of the situation in an interview with RTL on Monday. 'We need to take back control. In recent years, especially in 2023 and 2024, we have lost control of our public finances,' he stated.
However, what Politico and the court both do not mention is that tens of billions of this spending is going to France's exploding immigrant population.
As France has noted, academics have put the costs of migrants in France at approximately €25 billion a year, with some having even higher estimates. However, many of those with a migration background have French citizenship, and these are not counted in such statistics.
France's budget deficit has significantly expanded as of late, reaching 5.8 percent of GDP last year, far exceeding the European Union's 3 percent ceiling.
Despite the French government's deficit reduction pledges, the situation is not expected to improve substantially in the near term. The deficit is projected to decrease to only 5.4 percent by 2025, with the 3 percent target not anticipated until 2029.
Both the EU and the International Monetary Fund (IMF) have expressed concern over France's escalating spending. Last week, the IMF advised France to curtail welfare spending and proceed with pension reform.
Also read: $67 In France And $798 In US – Why Prescription Drug Prices Are So High In America
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