French State Offer Debt Relief

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The French railway network is often cited as a fantastic example of how a national railway network can be run. There’s no doubt that it provides a fantastic service to people throughout the country, but whether it’s an efficient system is a completely different matter.

The SNCF Network is literally drowning in debt, latest estimates for last year suggest that it has a debt of over 46 billion Euros and it’s continuing to rise.  Some experts believe that it will reach over 50 billion by the end of the decade given current progression.  Needless to say this is a huge amount of debt for any organisations to service, let alone reduce in any meaningful way.

President Macron has been under pressure to do something about this debt and reform the industry.  His latest announcement suggests  that there will be some relief for SNCF with the French state taking over part or all of this debt burden over the next few years.  There was no exact amount specified but it will probably be linked to the extent of the reforms that Macron is proposing.

The president suggested that the SNCF is more than 30% less efficient than other European rail networks.  Many have criticised the amount that the state has invested in it’s railway infrastructure, but the figures suggest that it is not the amount but how it has been invested.

The figures are obviously huge and indeed are actually so big that they will significantly effect the French Government’s own debt to GDP figures.  There are some economists who forecast that taking over the whole debt may even push France over the politically sensitive 100% ratio where the Government owes more than it earns.

If the State does take over the debt it is seen as vital that there are significant reforms to the corporation as part of that deal.  It is unlikely considering the President’s politics that any deal would be sanctioned without some serious cost cutting measures being implemented along side it.

Many British people look longingly over at the French railway network’s performance and wish the same could be implemented here.  Yet it’s obvious to those who keep an eye out on French politics and current affairs that this is a real political issue in France. Indeed many rightly point out that the UK system is actually much more efficient at least in monetary terms than the network run by SNCF.  It’s easy to sit and watch news reports from the UK TV about how waiting times and delays on UK networks without realising how much the French actually spend on theirs.  Incidentally, if you want to access these reports from the BBC – this application can allow access to BBC iPlayer from France.

President Macron has insisted that the debt would be taken over only when his reforms are actually being carried out. There are already many strikes taking place in the transport sector and efficiency reforms within SNCF are almost certainly going to lead to more when implemented.

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