Olivier Klein , published by Les \u00c9chos , on the 2nd of January, 2026<\/p>\n\n\n\n
We know it \u2014 or rather, we should know it after so many years trapped in the vicious circle in which our country finds itself. France will not escape the circular chain of causality linking excessive compulsory levies, an employment rate that is too low, and an uncontrolled level of public debt through yet another increase in taxes and social contributions.<\/p>\n\n\n\n
Stabilising the debt ratio instead requires a coherent strategy based on effective management of public spending, policies aimed at increasing our growth potential \u2014 including a higher employment rate \u2014 and a genuine approach to change management, so that all stakeholders understand and adhere to the path we must take to make our model sustainable once again.<\/p>\n\n\n\n
Rethinking the rules of Social Security<\/p>\n\n\n\n
The greatest margins lie at the very heart of the social model, starting with pensions, the largest item of public expenditure. Raising the average retirement age by one year, combined with greater convergence between public- and private-sector schemes and an active policy to promote senior employment, would make it possible, within a few years, to generate \u20ac10 to \u20ac15 billion per year (direct effects and those induced by stronger growth), without undermining retirees\u2019 living standards.<\/p>\n\n\n\n
It is also necessary to review the rules governing the use of the Social Security system in order to limit moral hazard: sick leave, the consumption of healthcare services and medicines must be organised so as to ensure responsible and solidarity-based use.<\/p>\n\n\n\n
Rebalancing rights and duties, strengthening controls where necessary, but also encouraging virtuous behaviour \u2014 both in health and in the labour market \u2014 is a sine qua non for the sustainability of our social model.<\/p>\n\n\n\n
At the same time, better management of public administrations \u2014 reorganisation with targeted non-replacement of departures, reduction of administrative overlaps, digitalisation, and redeployment towards frontline services \u2014 could yield around \u20ac20 billion per year, with a reduction in staff of about 5%, without any reduction in civil servants\u2019 pay.<\/p>\n\n\n\n
Several advanced economies have reduced their number of civil servants by 7% to 10% without triggering a slowdown in growth or a decline in the quality of public services.<\/p>\n\n\n\n
Acting on expenditure \u2014 and employment<\/p>\n\n\n\n
But a lasting exit from the French trap depends as much on employment as on expenditure control. A six-point increase in the employment rate, bringing France up to the German level, achieved \u2014 beyond raising the retirement age \u2014 through a coherent reform of unemployment insurance, the fight against inactivity traps, and a more effective system of vocational training, would generate nearly \u20ac60 billion in additional revenue under unchanged tax legislation. That represents a reduction of around 60% of the primary budget deficit.<\/p>\n\n\n\n
An increase of roughly ten points in the active population \u2014 equivalent to the Dutch level \u2014 would even bring the primary deficit down to zero, following a logic of wealth creation rather than additional taxation, which would instead be regressive.<\/p>\n\n\n\n
Still, these reforms \u2014 assuming they are voted into law \u2014 would have to be genuinely implemented. This requires an assertive approach to change management: a clear and intelligible national strategy, well-defined and understandable milestones, appropriate means to achieve them, and incentive systems aligned with the objectives pursued so as to secure the engagement of all.<\/p>\n\n\n\n
By combining 1.5 to 2 percentage points of GDP in recurring savings with 1.5 to 2 percentage points of annual revenue linked to higher employment and growth, France could improve its public balance by 3 to 4 points of GDP within a few years. Enough to stabilise public debt \u2014 not through inevitable austerity, but through a calm and responsible reassertion of control over our economic and social model.<\/p>\n\n\n\n
To procrastinate further \u2014 or worse, to move in the opposite direction of what reason and successful international experience teach us \u2014 would be to blindly drive the country ever deeper into a vicious circle that tightens day by day.<\/p>\n\n\n\n
Olivier Klein
Professor of Economics, HEC<\/p>\n","protected":false},"excerpt":{"rendered":"
Olivier Klein , published by Les \u00c9chos , on the 2nd of January, 2026 We know it \u2014 or rather, we should know it after so many years trapped in the vicious circle in which our country finds itself. France will not escape the circular chain of causality linking excessive compulsory levies, an employment rate […]<\/p>\n","protected":false},"author":1,"featured_media":6285,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133,136],"tags":[],"class_list":["post-10231","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economical-and-financial-crisis","category-economical-policy"],"acf":[],"yoast_head":"\n