Browse Month

April 2018

The bad Corrèze example of the UMP

The UMP regularly attacks Francois Hollande on the management of Corrèze, which he chairs.

But forget that the department owes much of its situation to the management of his predecessor, a member of the presidential party.

“Holland is at the head of Corrèze, which is the Greece of France.” The sentence became a gimmick for Claude Gueant. At each meeting, the Minister of the Interior comes out the same good word, intended to discredit François Hollande, who chairs the general counsel of this department since 2008.

Mr. Gueant is not the only one. Laurent Wauquiez, the Minister of Higher Education, has also repeatedly criticized the management of the department, including an interview in Figaro, January 17. He refers to the same number on every occasion, explaining that in ” only four years, there has been an increase in operating expenses of 30% and an increase in debt of 40%”.

RIGHT FROM 1998 TO 2008

But too much to push Holland, the two ministers come to distort the reality. Notably knowingly forgetting that François Hollande will celebrate in March his four years at the head of the department. He presides since March 20, 2008, after the left won the cantonal. Previously, Corrèze was led by Jean-Pierre Dupont (UMP) since 1998, and by the right for much longer.

In 2008, the arrival of François Hollande, the department is in a difficult situation, with 289.9 million euros of debts, or 1 206 euros per capita, according to Bercy figures. Indebtedness resulting from operating expenses which have been steadily increasing since 2005: from 194.8 million euros of operating expenses in 2005, the department rose to 245.006 million three years later, in 2008, ie 25% increase. Among rising expenses, personnel costs increased from 25.83 million in 2005 to 47.06 in 2008.

This increase in expenses is mainly due to the use of the loan. The bank’s outstanding bank debt rose from 148.06 million in 2005 to 289.04 million in 2008, an increase of 95%, making the department the most indebted per capita in France. At the same time, the department’s financial expenses (its debt burden) tripled, from 3.98 million in 2005 to 11.1 million in 2008.

(The graphs are all based on data from Bercy Colloc, the Ministry of Finance’s website on local authorities, which publishes the annual figures collected by the Directorate General of Public Finance and are expressed in thousands of euros)

Part of the loans made by the department is at variable rates. However, the financial crisis, which breaks out in 2008, causes a sharp increase in these rates and therefore the cost of these loans for the Corrèze. But the department also resorts to taxation. Between 2004 and 2008, local direct debits increased from 71.9 million euros to 90.4 million, notes the regional chamber of accounts of the Limousin, a rate of increase of 25%, while inflation is, at the same time, 8%. The regional chamber details by type of taxation: + 28.5% property tax, + 30% residential tax, + 28.7% business tax.

THE LATE REFORMS OF HOLLAND

François Hollande thus inherits, when he arrives at the head of the Corrèze, a situation already severely degraded, where the finances are sealed by the subscribed loans, whose load (interest paid) weighs on the finances.

The Socialist takes note and commits to curb the indebtedness of the department. This plan involves a decrease in capital expenditure, which rose to 77 million in 2009, then 58.5 million in 2010, against 104.7 million in 2008, but also by a “recovery plan” and therefore new loans , which notably make it possible to “consolidate debt” by going from 51% of fixed-rate loans to 66%.

But Francois Hollande does not want to practice cuts too brutal, and at the same time puts in place an “anti-crisis plan” of investments to limit the effects of the financial crisis. He also says he does not want to raise taxes. And the stock of debt continues to climb: 333.05 million in 2009, 345.56 in 2010. Mr. Holland also allows some expensive measures, as the Rue89 notes. For example, iPads offered to college students in the department for a total cost of 1.5 million euros.

Becoming a candidate for the primary and the presidential, which is worth to be attacked on its local management, Mr. Holland is forced the following year to set up a real “plan of rigor”: higher taxes (including of the built land tax, increased by 6.5%), the end of some benefits, such as free transportation, or means-tested child care assistance, but also lower spending investment, should save € 11.5 million in budget, the amount of exceptional assistance provided by the State for the 2011 budget.

EXAGGERATED FIGURES

The figures of the UMP are therefore somewhat misleading. The department’s operating expenses rose from 226.7 million euros in 2007, the last budget of the right-wing majority, to 266.908 million in 2010, the latest figure available on the website of the Ministry of Finance. That’s an increase of 17.7% in three years. Capital expenditures increased from 190.9 million euros in 2007 to 143.6 million in 2010, a net decrease of 24%. The staff costs, they remain relatively constant since 2008.

As for taxation, attacked by Mr. Wauquiez late January in Le Figaro, it is certainly rising, but it is constant since 2004, while the endowment of the state department tends to stagnate.

So, is Corrèze the “Greece of France”? Without question, the department is the most indebted of all, with nearly 1,400 euros of debt per person, three times the average of French departments. Nevertheless, this situation is not entirely attributable to François Hollande. The Socialist has instead stabilized and consolidated the loans- click this, inherited largely from his predecessor.

Mr. Hollande may be criticized for not having put in place a real policy of deleveraging and for having only slightly reduced the charges while pursuing an increase in taxation. It is moreover what concluded the regional court of the accounts of the Limousin, in a report of October 5, 2010. But the examination on the long-term makes it difficult to make the Socialist a trial in mismanagement, insofar as the department’s debt is largely due to its predecessors.