It was after the true wishes of fiscal consolidation will be found

The budget marathon ends. The National Assembly and the Senate have come out one last time, today, to approve the conclusions of the joint mixed Committee (SJC). In the meantime, the Government should still slightly vary, by amendment, the compromise drawn up by the CMP. "It is not question of burdening a euro more deficit", warned the week last François Fillon. In the two months of consideration of the Bill, the Executive has urged parliamentarians to return to the rank, not hesitant steps to impose back on amendments considered by the Prime Minister and "blows of knife that weaken the fiscal credibility."

Because with this budget, the France has engaged in an unprecedented deficit-reduction program. It plans to reduce the public deficit to 6 of GDP end of 2011, against 7.7 officially expected end of 2010. "Dictated under the constraint of the market, this budget is smart enough, because there is not bashing on the expenditure side, while the reduction of the tax niches will affect relatively affluent households without any impairing frankly their consumption," approves Mathieu Plane, an economist at the OFCE. The deficit reduction will primarily pass through "natural" revenue recovery after the crisis as well as by the end of the recovery plan: the negative impact on growth could be limited. Choice to reform pensions is also deemed competent, as this gives committed to markets without the recessive effect in the short term.

Additional reforms

Nothing to see, therefore, with the cures austerity decided in Greece or Ireland, affected by the crisis of sovereign debt. Nothing to see no more with the United Kingdom or the Spain, where the explosion of deficits makes it the most important effort. "The France is the minimum to reassure the markets and the maximum to not crack growth in a very uncertain environment," summarizes Bruno Cavalier, Chief Economist at Oddo Securities. Stressing the need for the France of commitments next year, the economists doubt not really its ability to do so. Even with a less than that of the Government growth forecast, OECD and IMF estimate that it will take little or no its 2011 deficit goal.

It was after the true wishes of fiscal consolidation will be found. Since the objective of the France to reduce its deficit to 3 of GDP in 2013 is far from credible at this point, according to economists. "The real test will be the preparation of the 2012 budget in full campaign for the presidential election", says Bruno Cavalier. The OECD does not hide that further reforms will be necessary "to maintain the cap". "". "The margins for manoeuvre will be much lower on the niches and revenue collected may not be at the Rendez-vous in view of the impact on growth posed the simultaneous implementation of the plans of rigour in Europe", feared Mathieu Plane, advocate a less rapid deficit reduction schedule.

Mathilde Lemoine (HSBC) and Patrick Artus (Natixis), deem them, that a true turn of screw will be unavoidable in 2012 and 2013 (read below), to find the some 60 billion required and not lasting the Germany win. The absence of tangible measures of rigour to this deadline would quickly enough to the France under pressure.