25 September 2020

2020- n° 243

At the end of Q2 2020, the Maastricht debt accounted for €2,638.3 billion Debt of the general government according to the Maastricht definition - second quarter 2020

At the end of Q2 2020, Maastricht’s debt reached €2,638.3 billion, a €199.9 billion increase in comparison to Q1 2020. It accounted for 114.1% of gross domestic product (GDP), 12.7 points higher than last quarter, the highest quartely increase since the beginning of the series in Q4 1995. Part of the increase in public debt in the second quarter fed the general government’s cash position, which increased sharply (€93.9 billion) ;It corresponds in part to future financing needs related to the health crisis. Net public debt increased more moderately (€105.8 billion) and stood at 100.3% of GDP.

In the second quarter of 2020, the State’s contribution to debt increased by €113.4 billion. This indebtness results from the increase in intervention expenditure (particularly furlough scheme), as well as tax deferrals and the contraction of tax revenues due to the decline in economic activity. This increase in state debt was accompanied by an unprecedented €69.9 billion increase in currency and deposits. The State's debt increased mainly in the form of negotiable short- and long-term debt (up €65.4 billion and €45.1 billion respectively). Deposits at the French Treasury also increased (+€3.0 billion).

The contribution of social security funds to debt increased strongly too (€+84.9 billion) due to ACOSS (€+59.0 billion), Unédic (€+15.4 billion) and CADES (€+7.6 billion). ACOSS, CADES and Unédic increased their short-term negociable debts by €78.4 billion. The deferrals and cancellations of contributions and part of the furlough scheme had to be financed by ACOSS and Unédic. In addition, part of the increase in debt feeds ACOSS’s currency and deposits (+€22.1 billion). Cades' indebtedness anticipates the takeover of Acoss' debt.

The contribution of local government to the debt increased to a lesser extent (€+2.7 billion) mainly due to Société du Grand Paris (€+2.3 billion after €+2.5 billion in Q1). Departments and municipalities paid off their long-term debt respectively by €0.8 billion and by €0.3 billion, but increased their debt in deposits by respectively €0.6 billion and €0.3 billion. Regions paid off short-term loans (€0.2 billion) but increased long-term loans (€0.3 billion).

The contribution of central agencies to the debt diminished (€−1.1 billion), after a €0.1 billion decrease in Q1. France compétences and la Caisse de la dette publique reduced their debts respectively by €0.4 billion and €0.5 billion.

At the end of Q2 2020, the net public debt reached €2,319.8 billion, a €105.8 billion increase (equivalent to 100.3% of GDP versus 91.9 % the previous quarter). The €94.1 billion gap between changes in net and gross debt mainly reflects an increase in the cash position of the State and social security funds (respectively €+69.9 billion and +€23.6 billion).

In Q2 2020, the overall value of quoted shares and undertaking for collective investment schemes (UCIs) held by general government units went up by €19.0 billion to €235.1 billion after a €52.7 billion decrease in Q1.

The quoted shares held by the State increased by €3.9 billion because of the rise in the stock market price of EDF, Engie, FDJ, Renault and Safran. Moreover, the quoted shares held by central agencies (+€5.1 billion) and social security (+€9.9 billion) funds went up due to the increase in the stock market price and an €4.8 billion increase in Unédic units in a money market fund.