France ends the Sarkozy era in the worst possible way. In the first quarter of 2012, the last of the centre-right leader's five-year presidency, French public debt further increased by 72,4 billion, for a total of 1.789,4 billion euros. That is, according to the data published today by Insee, the transalpine statistical institute, 89,3% of GDP.
The debt/GDP ratio therefore increased by 3,3 points compared to the previous quarter, and is now very close to the 90% threshold, considered as the limit beyond which it can be demonstrated that public debt puts a decisive brake on economic growth.
The increase in debt is mainly due to progression of state debts (rising by 46,8 billion to 1.381,9 billion) and social assistance, while local public administrations improved their budgets.
Meanwhile, France announced at the EU summit that it does not intend to include the obligation of a balanced budget in its constitution. This was stated by the French president Francois Hollande in the press conference in Brussels at the end of the meeting. "We will instead vote on a budget planning law to restore the balance of public finances"he said.
