Public finances during the five-year term 2012-2017 in France

Controlling the government deficit was a clearly stated priority of candidate François Hollande during the 2012 presidential campaign in France. He planned to bring the government deficit below the 3% ceiling beginning in 2013, and to achieve a balanced budget in 2017. The actual deficit proved to be above these forecasts, in part because the deficit reduction strategy depended on assumptions for growth that did not materialise. While the turnaround in public finances was slower than anticipated, the various measures adopted during 2012-2017 nevertheless significantly contributed to reducing the deficit, and are essentially concentrated over the first two years of the five-year term with significant tax increases. Reducing the deficit was not however the only purpose of the tax measures. Tax reductions were also adopted to favour employment and competitiveness, and the environment. In contrast, measures relating to public expenditure are much more difficult to chart and the amounts involved much smaller. Lastly, the reduction in public expenditure can be attributed in large part to a lower debt burden.