French minister commits unpardonable sin of telling truth: “We’re broke.”
**Posted by Phineas
And he’s deep in la merde, for it:
Michel Sapin made the gaffe in a radio interview, which left French President Francois Hollande and other ministers racing to undo the potential damage to the country’s reputation as a solid economy for investors.
On Monday, Mr Sapin said: “There is a state but it is a totally bankrupt state. That is why we had to put a deficit reduction plan in place, and nothing should make us turn away from that objective.”
The comments came as Mr Hollande attempts to improve the image of the French economy after pledging to reduce the country’s deficit by cutting spending by 60bn euros (£51.5bn) over the next five years and increasing taxes by 20bn euros.
It came as several high profile individuals, including the actor Gérard Depardieu, have left the country to avoid punitive taxes. Last week it transpired that Bernard Arnault, France’s richest man, had transferred his entire fortune to Belgium, where he hopes to gain citizenship.
Pierre Moscovici, the finance minister, said the comments by Mr Sapin were “inappropriate”. He added: “France is a really solvent country. France is a really credible country, France is a country that is starting to recover.”
Why do Moscovici’s claims remind me of Baghdad Bob?
Sapin later tried to “clarify” what he meant, saying France could still pay its bills, and he’s technically right; they’re not in danger of defaulting, yet.
But what’s truly interesting is the public reaction to Minister Sapin’s description of France as a “bankrupt state” — most of the public agrees with him:
But it now transpires that a large majority of his fellow countrymen share Mr Sapin’s view. In all 63 per cent agree that “in France, the state is bankrupt”, with 45 per cent saying the claim was “more or less justified” and 17 per cent feeling it was “totally justified”, according to a CSA poll for BFM TV.
You would think that, realizing that their nation is in a fiscal mess, French voters would not have voted for a government who only solution was to jack up taxes to confiscatory levels, leading to an exodus the most productive members of their population. Instead, they throw public fits over the least adjustment to their unsupportable welfare state. They see the problem, but they don’t see that it is them.
But before we in the States point and laugh too hard at France (some is always justified), keep one thing in mind: their debt-to GDP ratio (how much they owe vs. how wealth the nation creates) is at 91 percent. Imagine your credit card debt amounting to nine-tenths of your annual income, and you can see why someone would say they’re broke.
And in the United States? As of 2012, that same ratio stood at an estimated 100.8%, skyrocketing under Obama.
(Crossposted at Public Secrets)