this debt that we leave to our children

this debt that we leave to our children

With a deficit reaching 5.5% of gross domestic product in 2023, France could be forced by rating agencies to borrow at higher rates, and increase its debt even further. A cumbersome legacy left by the generation of the Trente Glorieuses to their grandchildren.

Christophe and Max may be forty-six years apart, but they have been living under the same roof for a month. The first sought to escape his solitude, the second accommodation in Paris for a reasonable rent. Brought together by the ensemble2générations association, the two cohabitants get along wonderfully and share a common passion for current affairs. From Christophe's three-room apartment, in the 19th arrondissement, they have not missed the information of recent weeks: the public deficit has reached 5.5% of gross domestic product (GDP) in 2023, much higher than this. which was anticipated by the government which was targeting 4.9%. If such a level alarms, it is because it is rare.

Since the turn of the century, it has only been exceeded twice: following the financial crisis of 2008, from 2009 to 2012, as well as during the health crisis of 2020-2021. To avoid a further slippage in the deficit for the 2024 vintage, the Minister of the Economy and Finance, Bruno Le Maire, unveiled on April 10 a “stability program” which will be the subject of a debate without a vote at the National Assembly, April 29. This text acknowledges the fact that the State must make 10 billion euros in additional savings. Too little for the Republicans. Through its president, Éric Ciotti, the opposition party has announced that it is working on a plan of 100 billion savings and has even brandished, in recent weeks, the threat of a motion of censure if the measures taken were not ambitious enough.

The High Council of Public Finances was also unconvinced, citing a “lack of credibility” and deeming it likely that “the structural part of the deficit is on the rise” compared to what the government presented. “The situation of France's public finances would thus remain among the most degraded in the euro zone,” warns the Court of Auditors in its annual report in March. The IMF (International Monetary Fund) is concerned about the growing divergence between a decreasing German debt and a constantly increasing French one. If all eyes are on the public deficit, it is because it further deepens a public debt that has gone crazy. Since 1975, the French state has systematically run a deficit, which fuels a debt that now exceeds 112% of GDP. In the last twenty years, its amount has more than tripled, going from 1,000 to 3,200 billion euros. “The consequence is that today, a growing share of state revenue is paying off a debt contracted yesterday by around forty years of public deficit,” explains Maxime Sbaihi, director of French studies at the Institute. Montaigne and author of Great aging* . According to the government's admission, the debt burden would increase from 46.3 billion euros in 2024 to 72.3 billion in 2027.

Generational conflict?

His personal economic future written in dotted lines does not give rise to a feeling of resentment in Max, whose generation will have to pay a debt that it did not contract. Because if Christophe, his roommate, was born at a time when debt was almost non-existent, the 23-year-old student does not hold this generation responsible for his rise. If he lives with an indulgent young person, Christophe knows that this colossal deficit fuels resentment. “This resentment exists,” assures the 69-year-old retiree. “We can see it in the comment areas of social networks where everyone blames the other for their supposed irresponsibility.”

While the health crisis was not yet over, a study, carried out in 2021, by the company Odoxa, estimated that 56% of French people feared a generational conflict. Young and old alike regret a lack of empathy on the part of their fellow citizens from other cohorts: 70% of those over 65 think that young adults do not realize the difficulties they face, while 57% of 18-34 year olds think the same thing about their elders.

Christophe feels more guilty about his lack of commitment. “I have the impression of not having fought hard enough against the financialization of the world,” explains the retiree. “We have allowed enormous inequalities to set in, which is a mortal danger for our democracies. While the debt, has always existed.” This is, in fact, not an unprecedented phenomenon in national history, but the proportions have varied. After the record level of 270% of GDP in 1944 (according to a Senate information report), a consequence of the pillaging of the years of Occupation, it declined in the post-war period. At the beginning of the 1970s, it stabilized at around 15% of GDP, before rising again after the first oil shock in 1973. France nevertheless remained far from default, which still happened to it eight times. repeated between 1558 and 1788.

Downgrading risk

At that time, the rating agencies did not yet dictate their law. Now their judgment is feared: will the accumulation of these uncontrolled deficits lead to a deterioration of the French rating in the coming weeks? This would result in an increase in the rates at which the French State borrows. “We run the risk of becoming a second-class country on the bond market, like Italy and Spain,” confirms Ydriss Ziane, lecturer in management sciences at IAE Paris-Sorbonne. Julien Salama, doctoral student in economics, urges us not to fall into catastrophism. He recalls that alongside liabilities, there is also an asset that is passed on: “We must not believe that the generation of our elders only bequeaths debt, they also pass on public administrations and infrastructure. » In 2020, as a student, he co-authored a column in The world . A response to another column, published in the evening daily, by three students worried about the amount of the debt and, above all, its consequences. “We have the impression of having only experienced crises and, yet, at the political level, we do not name this situation so as not to anger retirees, the age group who vote the most,” points out Emmanuel Blézès, 29-year-old financial analyst, one of the signatories.

The opposition between young people and retirees is not only played out at the financial level. Heritage is concentrated in the hands of seniors, as it has never been. The next generation will receive the greatest inheritance ever. At the end of 2023, the financial assets of French households represented just under 6,000 billion euros, almost double the state debt.

A heritage that can be put to good use within a framework of intergenerational solidarity. “When I changed apartments four years ago, I wanted it to be a little bigger than the previous one to accommodate and help a young person,” explains Christophe, who, when he was a lecturer at university, was already in dialogue with his cadets. In total, nearly 60% of assets (whether financial or non-financial) are held by seniors. “They benefited from low prices, then from unconventional monetary policies which allowed them both to easily access property when they were young and then to benefit from a high valuation of this heritage,” explains Maxime Sbaihi. And in their old age, their pensions are indexed to inflation while this is not the case for salaries.

Alongside these expenses, we are cutting investments for the future. » Budgetary pressure often forces us to cut back on education, innovation, sustainable development… However, to ensure that the citizens of tomorrow enjoy the freedom to build their country as they wish, nations have decided to set up funds dedicated to them, such as Australia, with its “Future Fund” since 2006 or Quebec, with its Generations Fund, created the same year. They are both fueled by a tax levied on natural resources (read box below) and are intended to be protected today to be reinvested tomorrow.

Ecological debt

High financial debt carries the risk of increasing another debt: ecological debt, a non-monetary concept describing the fact that humanity lives on credit in terms of natural resources. “It’s difficult to feel responsible for this situation, because it was not only passed down from my generation to the next,” explains Christophe. We can go back even further, to the beginning of the industrial era. » The retiree recalls that although aware of environmental issues, a part of the youth has also developed a certain taste for the unbridled consumption of low-cost clothing, even though this is harmful for the planet. Faced with this observation, Christine, 61, doubts that the future will be better: “Young people are right to be worried, we have sabotaged everything for our well-being, without counting. But are they doing better than us? Are they trying to reverse the trend? I doubt. » Turning the tide is all the more difficult when financial distress prevents investment in a greener future.

Especially as the law evolves. On October 27, the Constitutional Council rendered a historic decision. Seized regarding a project to bury nuclear waste in the village of Bure (Meuse), the highest French court ruled that this radioactive storage does not “disregard” the rights of future generations. Legislators must ensure, she says, that “choices intended to meet the needs of the present do not compromise the ability of future generations and other peoples to satisfy their own needs.” Thus, the Sages “force us to bequeath a healthy environment tomorrow”, deciphers Marine Calmet, environmental law lawyer. This also applies to our public finances.

* Ed. The observatory, 176 p. ; €18.

A fund for the next generations?

In 2004, Quebec's debt was 38% of GDP, when Michel Audet, Minister of Finance of the province, imagined with the liberal government of Jean Charest a system to reduce it in the long term.

The idea is simple: create a tax to fund a Generations Fund dedicated to reimbursement. Since 2006, this income has been taken from the exploitation of local natural resources (hydraulic royalties, mining revenues, etc.), an idea inspired by a nearby experiment. “A system already existed in the province of Alberta, which made money with its oil revenues,” explains Michel Audet, 83, today. The Caisse de dépôt et placement du Québec must make this forced savings prosper on the financial markets.

Initially, the fund is protected to avoid any use other than the gradual repayment of the debt. It is only recently, in 2022, when the debt is at 39%, that it is used to finance a tax cut. “The initial idea was for the debt to be bearable for the next generation,” continues this former member of the National Assembly of Quebec. As the proportion of active Quebecers will decrease, the debt risks being heavier. » In March 2024, the value of the Generations Fund amounted to 18.5 billion Canadian dollars (nearly 12.6 billion euros), or 8.4% of Quebec's net debt.

The debt burden

In 2017 Out of 1,000 euros of public spending, 37 euros were intended to pay debt service. This amount should explode by 2027 (from 50 to 80 euros, depending on the sources).

In 2024 The debt burden is equivalent to almost half of the income tax collected in 2022.

In 2027 The State could spend on debt servicing the equivalent of the current Education budget (81.7 billion euros), more than the 2024 army budget (64 billion euros).

Sources: Court of Auditors, European Central Bank,,

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