Diary

My response to Sarkozy’s RFP

Yesterday, Nicolas Sarkozy made an RFP (request for proposals) on how to reduce the French budgetary deficit and the French public debt.

“Ces messages volontairement apaisants sur les déficits, distillés lundi au moment où les Français s’inquiètent pour l’endettement du pays, n’empêchent pas Nicolas Sarkozy de promettre, pour l’an prochain, une vraie réflexion sur la situation des finances publiques. De 3,4 % en 2008, le déficit public devrait en effet passer à 8,5 % l’an prochain. Or, la France s’est engagée auprès de Bruxelles à le ramener sous la barre des 3 % en 2013. Nicolas Sarkozy a confirmé lundi la tenue d’une conférence nationale sur les déficits, qui aura pour objectif de «débattre de propositions pour sortir de la spirale des déficits et de l’endettement». Priorité affichée : la maîtrise des dépenses publiques. Excluant une nouvelle fois tout relèvement des impôts, Nicolas Sarkozy a indiqué que les intérêts du grand emprunt seraient «immédiatement gagés» par des économies d’un montant équivalent dans les dépenses de l’État.”

http://www.lefigaro.fr/conjoncture/2009/12/15/04016-20091215ARTFIG00023-limite-l-emprunt-se-fera-sur-les-marches-.php

My proposals are:

A) On the French budgetary deficit:

1) The French government should abolish the following expenditures (the resulting savings are stated in the right column and denominated in € millions):

Foreign aid € 2 264
Subsidies for Mayotte, Saint-Pierre-et-Miquelon and Wallis and Futuna € 24 750
Reserve funds spent on castles € 70
Fishermen € 310
The Elysee Palace’s excess budget (68 of 100 mn EUR PA) € 68
Half of administration € 1 249
Ecological vehicles € 1 000
The Elysee Palace’s spending increase € 3
EU contributions € 18 700
Renewable EPs € 700
Subsidies for the film industry € 500
Half of pension spending € 2 490,50
Protestant pastors
Excess ministerial officials
Ministerial cabinet officials
Excessive salaries of ministerial officials
Wine spending by the Elysee Palace
Half of party spending by the Elysee Palace € 0,50
Presidential salary increase (2008) € 0,14
An excessive number of ministries
Total excluding protestant pastors € 64 255,14
Total excluding protestant pastors (calculated by the program) € 64 255

The total resulting savings are unknown. The total known savings amount to €64.255 bn, which is almost enough to balance the 2009 budget of the French government (which includes a €70 bn deficit). The other savings would certainly be sufficient to balance the budget. Thus, the French government would stop growing the public debt.

These savings would not eliminate the public deficit, however. The public deficit is a broader term than the budgetary deficit of the French government and includes the budgetary deficits of entitlement programs, local governments, and state-owned corporations.

B) The public debt

France’s current public debt is €1400 bn. It could be reduced by 10% immediately if the French government privatized all the corporations it owns and lists on the Parisian Bourse (the revenue: €102 bn) and sold all the palaces it owns and doesn’t classify as not-for-sale (the revenue: €38 bn).

It could earn additional money by selling:

1) The state-owned corporations that are not listed on the Parisian Bourse (SNCF, RFDF, France Televisions, La Poste, and its shares of the Dexia bank);

2) French lignite reserves (the revenue: $196.68 bn);

3) French uranium ore reserves;

4) State forests;

5) Palaces classified as not-for-sale (e.g. the Domaine de Marly, the Domaine de Souzy-la-Briche, the Rambouillet Palace, Fort De Bregancon, Hotel Beauvau);

6) 60 of 61 Presidential limousines;

7) All 7 Presidential scooters;

8) Exquisite train stations (e.g. the Clichy-Levallois train station and the Paris-Bercy train station); and

9) The rails from unprofitable railroad lines (which should be closed).

The fact that Sarkozy (the man who, as Budget Minister, presided over record budgetary deficits (each of which exceeded 5% of GDP)) cannot balance the budget or reduce France’s public debt (which increased by 20% since he was installed as President) did not surprise me. He’s an incompetent president. He should listen to me.