Futuribles Journal n° 313

Économie, emploi - Institutions

The Untenable Rigidity of Public Expenditure in France


With the parliamentary debate on the French budget for 2006 in full swing, Alexandre Siné sets out the prerequisites for a proper understanding of the issues surrounding public expenditure. The topic is of course frequently aired in the media. But the questions of public finance are generally treated either by focusing on "totem" figures whose size is beyond the instinctive grasp of the normal person (a deficit of 46.8 billion euros - why not 60?) or by highly technical discussions (annexes to the main budget, Title III, etc.) that are meaningless to the man or woman in the street.
So we are very grateful to Alexandre Siné for giving us here an expert's analysis, focusing on a few crucial topics, that is easy to understand and essential for a genuine reflection about how much flexibility the French authorities will have in the future. Indeed, this article shows to what extent the national budget is shaped - aside from all the attempts to optimise it generated every year by the fertile imagination of the services of the finance ministry - by expenditures that "increase slowly but surely". This is fairly clear from the parliamentary voting mechanism that operated under rules set in 1959 whereby the "services votés" - i.e. the minimum amount that the government considers to be indispensable in order to maintain public services at the level of the previous year - were voted on as a whole, although they account for more than 90% of public expenditure.
Today, the 2001 "organic law" which applies to financial legislation (called LOLF) has altered this procedure. But simply applying this law will not do anything to change the salient fact affirmed by Alexandre Siné: that this structural rigidity in the national budget constitutes an abdication of political control, as every year parliament has less and less say in the financing of the central government, except to continue to sell off the state's assets as long as there are any to sell.

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