“Pleading for budgetary austerity would be counterproductive”

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INTERVIEW - For the deputy Laurent Saint-Martin (LREM), the debt, "necessary", will finance the return to growth.


© Sipa
INTERVIEW – For MP Laurent Saint-Martin (LREM), debt, “necessary”, will finance the return to growth.


From this Monday, he will spend his days and part of his nights in the hemicycle. For his first budget as rapporteur, Laurent Saint-Martin, deputy (LREM) of Val-de-Marne, pleads for the payment of end-of-year assistance to the most vulnerable households.

Has the debt turned into a bottomless pit?

It is controlled and it is controllable. We must not make this subject anxious, but take it responsibly. First of all, it is a debt which increases according to the most favorable conditions that France has ever known: borrowing rates are very low, and the European Central Bank buys government bonds on the secondary market. It would therefore be guilty not to use these financing conditions to meet the urgency of the crisis and the need to revive the economy. But just because the loans are cheap does not mean that they should not be repaid. A government debt is not like that contracted by a business or a household. It refinances itself with lower charges. What matters is the credibility of a State to repay. When you are the fifth or sixth world power, when you have institutional and political strength, an ability to raise taxes, you are loaned more than what you are looking to borrow. Today, when France issues debt securities, there are more demands than what it offers on the market. This is the French signature.

If it is a question of saving our economy and our jobs, we are in good expenditure

So it’s limitless?

Our creditors are not cash dispensers! The tap is not on and this attractiveness is not a license to do anything with public funds. Debt appears useful if it finances the right expenditure and it becomes dangerous if it finances the wrong expenditure. What is the wrong expense? It is the operating expenditure which does not know how to stop: typically, to finance our State apparatus more than of reason. Today we are in exceptional circumstances. And that takes hundreds of billions of euros. Three solutions to find them: draw on its reserves, but France does not have any. Raise taxes, we said we would not do it. Or borrow. If it is a question of saving our economy and our jobs, we are in for a good expense. So let’s change our perspective on debt.

Has the government converted to useful debt?

The situation has changed, not the speech. There, we are talking about raising a country. Money has not become magic and increasing your debt is not good news, but it is necessary.

The return to economic prosperity and balanced public finances will take time

Who will pay?

We are not spending money lost. We are investing for a return to growth and consumption which will bring tax and social revenue. All of this is dynamic. We have to finance our public spending from our revenues. What our country has never been able to do since the mid-1970s. A State can go into debt to withstand times of crisis, but not its current lifestyle. A household understands very well that it can take out a loan to buy a house that it will resell, but that it becomes dangerous if it is to pay for its daily groceries. For the state, it’s the same.

Does France risk bankruptcy?

Today, no risk. Notably because it has the best reputation in terms of the stability of its institutions, political and financial, and the credibility of its public actions. Moreover, if we were close to bankruptcy, we would not be loaned at reduced cost. But the return to economic prosperity and balanced public finances will take time. Advocating fiscal austerity would be counterproductive. The public deficit should be around 5% in 2023 and below 3% in 2025. It will not be before, we must not lie to the French.

Will there be counterparts for aid paid to businesses?

Yes of course. I always said it. There will be reciprocal commitments! But conditioning the recovery plan as a whole makes no sense. What matters is that companies go further in environmental, social and societal matters. The LREM group will bring amendments to the counterparts in terms of gender equality, value sharing and employment.

Support measures, whether for businesses or households, must go to those who have dropped out

Is there a need for a rebalancing in favor of the most disadvantaged??

How do we support the sectors that have already left and those that are on the ground? The French who have not seen their purchasing power drop and those who have become poorer? We must make a careful diagnosis of the victims of this crisis. Support measures, whether for businesses or households, must go to those who have dropped out. This involves two things that will be reflected in the amending finance bill at the end of the year: broader support for the solidarity fund and assistance to the most vulnerable households.

It’s a turn?

I am tired of the term “president of the rich, president of the offer” contrary to the reality of everything that has been done in three years. Increase in the activity premium, the disabled adult allowance, the minimum old age… Find me a recent five-year term that has done so much for the most vulnerable! Since April, we have already put in nearly 890 million euros to help these populations. But we must go further. I would like us to end 2020 with specific support for those who are suffering from the crisis: precarious families and young people under 25 who do not receive the RSA. It’s an idea that emerged within our movement; Stanislas Guerini had offered a deconfinement check at the end of the year. I am in favor of it. Fall will be social.

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