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Terra Nova Calls for €100–120 Billion Annual Adjustment to Stabilize France’s Public Debt

The note frames broad, low‑rate tax hikes as the most efficient way to prevent interest costs from fueling further debt.

Overview

  • The left-leaning think tank says France must deliver a yearly fiscal effort equal to about 3.5% to 4% of GDP to halt a worsening debt trajectory.
  • A one percentage point increase in value-added tax is estimated to raise about €11.4 billion per year, with a one point rise in the CSG yielding roughly €16 billion.
  • Measures targeting retirees’ savings and pension indexing could free up to €40 billion over time while protecting the lowest pensions.
  • Additional contributions from wealthy households and companies are outlined at roughly €10–15 billion each, with targeted cuts to tax breaks.
  • The plan aims to stabilize debt near 120%–130% of GDP from 115.6% at end-June, using a 3.5% refinancing rate as a stress test and citing southern Europe’s past consolidations as precedent.