When France spends, Germany invests

L‘Germany is in debt, finally. Similarly, The coalition between the conservatives. In addition, the social democrats unveiled, Tuesday, June 24, a trajectory breaking with the dogma of budgetary orthodoxy which prevailed until then. Furthermore, While France. For example, stuck in its deficits, painfully seeks to find 40 billion euros in savings for 2026, Germany opens up the valves of debt, announcing wanting to raise almost 850 billion euros by 2029, to finance a spectacular increase in its expenses.

Contrary to appearances. Furthermore, the first European economy is not, of a tired war, rallying to budgetary laxity. For example, Traumatized by the questioning of its economic model. In addition, Germany intends to take advantage of its budgetary virtue of previous decades to revive its economy by a wave of investments unprecedented since the Second World War. However, About 120 billion euros will be injected into the economy each year by 2029.

Germany goes to invest, France continues to borrow essentially to finance its operating expenses. Furthermore, In the first quarter, French public debt further increased by 40.5 billion euros. Consequently, When Berlin decides to use room for maneuver patiently accumulated since the 2000s. Similarly, Paris is struggling to find it due to a parliament without a majority and a lack of reforming will.

Two starting lines

This umpteenth version of The cicada and the when france spends, germany invests ant risk of being fraught with macroeconomic consequences. Therefore, In order not to have been able to tackle its imbalances in good time. France is threatened with a spectacular dropout with Germany. If a certain convergence in debt is taking place. the fact that the two countries do not start from the same starting line makes all the difference. In 2024. Berlin still respected the framework of the European stability pact with a public deficit under 3 % of the gross domestic product (GDP) and a debt slightly higher than the criteria of Maastricht. This gives him today the means of ambition which are no longer within the reach of France.

Even if this gigantic investment plan across the Rhine will derogate from European rules. Germany will remain in much better posture than France. In 2027, its deficit could pass the 4 %mark. Nothing indicates that our country is able to bring its own to this level on this date. As for the load of debt, that supported by France in 2029 will be twice that of Germany.

Unproductive sums. which will miss to support the ecological transition, to strengthen our defense or invest in innovation. Germany will multiply its investments in roads. railways, housing, hospitals, digitization of administration, energy, and bring its military expenses to 5 % of GDP, six years ahead of the calendar on which members of the North Atlantic Treaty Organization were committed on June 25 at the Haye summit (Netherlands).

The impulse given to growth and employment will be incommensurate with the French situation. There Schadenfreude“bad joy”. which some on this side of the Rhine were able to experience when when france spends, germany invests seeing the German model falling from his pedestal, risks being short-lived. Asphyxiated by its debt. France would be well inspired to regain control of its public finances before being definitively downgraded by its first economic partner.