Today, the Council of Ministers adopted the revised Draft Budget Bill for 2021 (“PLFR”).
The impact of the health crisis and the government's support measures to boost the economic recovery lead to an upward revision of the financing requirements for 2021 at €337.7bn, which represents an increase of €44.7bn compared to the initial Budget Act (“LFI”) for 2021. The State deficit to be financed in 2021 is thus increased to €219.5bn, compared to €173.3bn projected in the LFI for 2021.
This increased deficit is mainly the result of €15bn of new measures deployed by the Government to mitigate the economic impact of the third wave of the health crisis and the consumption of €28.8bn in carry-overs of 2020 credits voted but not yet disbursed. Indeed, the 2020 fiscal deficit, at €178.1bn, was €45.2bn smaller than the €223.3bn deficit approved in the fourth Supplementary Budget Act passed on 30 November 2020. As a result, financing resources mobilization led to a €63.4bn increase in the Treasury’s available cash balance between the end of 2019 and the end of 2020.
This requirement will be covered by a €47.8bn drawdown of the Treasury’s account. The medium- and long-term debt issuance programme and the increase in outstanding short-term government securities (BTF) are kept unchanged compared to the LFI for 2021 (€260bn in medium- and long-term issues and +€19.5bn increase in short-term borrowing at the end of the year).