Red alert

In 2003, public debt reached €16,000 per French citizen: The state's finances have seriously deteriorated and the shortfall in Social Security is growing. The accrued deficit is now as high as €63.4 billion. Faltering growth will not bring things back into the black. Fees withheld have risen for the first time since 1999. [...] Since December 31, 2003, France has effectively no longer met the two Maastricht criteria that established a ceiling for public deficit at 3% of GDP and debt at 60%: the former has reached 4.1% and the latter, 63%. [...] Nevertheless, the deterioration of public finances is unprecedented. Since the 1974 oil shock, France has never been able to end a fiscal year with a budget surplus; it always spent more than it took from taxpayers. In 2003, it spent €273.8 billion for €239.8 billion in revenues, generating a record deficit of €56 billion. One fifth of spending is not covered.

2004 will not be the year of reversal: the forecasted deficit is €55.5 billion, which means that come the end of September, the administrations will be living on credit. The deficit is not due to investment, capitalizing on low interest rates. Only 10% of state expenditures are invested. [...]

The state isn't the only one in the red. In 2003, public corporations — health and unemployment insurance — watched their deficits explode, reaching €9.4 billion. Social security now has a discovery authorization of more than €30 million with the deposit insurance corporation [did I get that right? — D] In all, 43.9% of the wealth produced by the economy that is received in the form taxes and withholdings is not enough to cover the cost of services.