Parliament draws up the “Financial Constitution”

It is a work begun more than three years ago that the Senate is preparing to close with the definitive adoption of the organic law proposal for the modernization of public finances.

Debt and investments will be the themes of the next five years: Parliament is preparing to renew the French “financial constitution”, voting on Wednesday two bills for better management of accounts, weighed down by repeated crises.

It is a work begun more than three years ago that the Senate is preparing to close with the definitive adoption of the organic bill (PPL) for the modernization of public finances devised by two budget specialists, the deputies Eric Woerth (LR) and Laurent Saint -Martin (LREM), with the blessing of Bercy.

Its adoption is accompanied by that of a PPL on the Higher Council of Public Finance and on Parliament’s information on public finances.

Complex texts

With these complex and expert texts, MM. Woerth and Saint-Martin, respectively President of the Finance Commission and General Rapporteur on the Budget at the National Assembly, open the hood of the law on the orientation of financial laws (Lolf) which this year celebrates its 20th anniversary to dive into the mechanics of budget of the country.

“This text is anything but an accounting or technical text: it is above all a political text, in the best sense of the term, which makes it possible to make our financial laws more readable, more understandable and more effective”, decodes Mr. Woerth, former Minister of the Budget of Nicolas Sarkozy.

The reform will make it possible to renew the dense discussion of the budget that occupies the two assemblies throughout the autumn. The financial year will be more aligned with the European calendar.

Spending limits

It will also make it possible to strengthen the control and evaluation capacities of parliamentarians, who have sometimes come up against objections from the Ministry of Budget not to use services.

A five-year “rule” of expenditure will also be put in place.

The Multi-Year Budget Planning Act must provide for future spending ceilings and the government must justify any overshoots.

A message sent to the European Commission but also a political signal to those in France who are worried about the expensive management of public money, while the government has loosened the purse strings in the face of the health crisis from Covid-19 but also before the presidential elections.

However, the reform does not put in place a “constitutional provision” for containing expenditure, envisaged by the Minister of Economy Bruno Le Maire.

Wanted by the Senate dominated by the right, the multi-year revenue trajectory was not maintained by the joint commission of deputies and senators.

“Not an austerity text”

Another novelty: the first budget for the next five years will distinguish between operating expenses and investment expenses.

A strong political marker as the billions of the recovery plan and those of the France 2030 plan have actualized the imperative of an industrial policy solidly supported by the state.

Another sign, the desire to put debt at the center of the parliamentary debate.

“The possibility of dedicating a debate in the Senate and the National Assembly to the public debt, which is now flirting with the 3,000 billion euro bar, has become a necessity”, says deputy Charles de Courson (Freedom and Territories), recognized budget specialist ‘National Assembly.

But there is no consensus on the reform as a whole. It aims “to impose a corset on the evolution of public spending, to use debt as a scarecrow”, underline the academics Christophe Ramaux and Henri Sterdyniak, members of the collective Les Economistes Atterrés.

The reform does not find consensus

This criticism is echoed by more left-wing parliamentarians.

These texts “promote and amplify an ordo-liberal ideology, characterized by budgetary rigor”, punishes the communist Jean-Paul Dufrègne.

It is not “an austerity text”, defends Saint-Martin. “It is in no way a question of favoring, through this text, this or that political orientation”.

“Don’t overestimate the Lolf’s ability to promote good public finance management. It’s just a tool in the hands of public officials,” said de Courson. “As Baron Louis said: + Sire, give me good politics, I will give you good finances +”.

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