France has been warned to cut its “critically high” government spending.
The International Monetary Fund says “high and rising government spending has been at the heart of France’s fiscal problems for decades”.
The IMF’s latest survey has outlined clear benchmarks – France must control its record levels of spending, reduce its debt, and tackle chronic unemployment.
Although a full-length check is still pending, the IMF warned that the country’s future growth has been significantly impaired by its debts and spending.
Last year, France's general government expenditure reached a record high of 57.5% of GDP. This was 11% greater than the eurozone average abd was reached despite the long years of economic meltdown, high taxes and austerity programme.
"The persistent spending pressures have pushed up not only public debt but also the tax burden on the private sector to very high levels," the report noted.
Local government spending in particular has continued to grow throughout the crisis years, with the IMF also noting that social expenditure was the highest in the developed world.
The report recommended that the government raise its minimum wage only in line with inflation and tighten rules over unemployment benefits. France's unemployment rate (10.5%) is currently more than twice that of Germany.
