The missions of the High Council of Public Finance (HCFP) are defined in articles 61 and 62 of the organic law on finance laws. Initially created by the Organic Law of December 17, 2012 on the programming and governance of public finance, the High Council of Public Finance was then tasked with ensuring: the consistency of the trajectory for a return to balanced public finances with France's European commitments; the consistency of annual targets presented in financial texts (budget bills, amending budget bills...) with multi-year public finance targets; the realism of macroeconomic forecasts in public finance programming laws, budget bills and stability programs.
The Organic Law of December 28, 2021 on the modernization of public finance management strengthened and supplemented its mandate, and the High Council now also assesses: the realism of public finance forecasts (revenue and expenditure) in budget bills; compliance with general government expenditure targets with regard to the multi-year guidelines defined in the public finance programming law; the consistency of multi-year programming bills concerning specific sectors of public action (defense, research, development aid, for example) with the public expenditure targets set out in the public finance programming law in force.
To give an opinion on the realism of the Government's macroeconomic and public finance forecasts
The HCFP is responsible for assessing macroeconomic assumptions - notably growth and inflation forecasts used by the Government to prepare key public finance documents- prior to their presentation to Parliament: public finance multi-year programming bills, budget bills, social security finance bills, amending budget bills, sectoral programming bills, and stability programs transmitted annually to the European Commission and the Council of the European Union. It is responsible for issuing an opinion on the public finance forecasts (public revenue and expenditure) in the initial and amending budget bills and Social Security financing bills.
If the Government has to modify its macroeconomic forecasts during parliamentary debates, it informs the HCFP, which must also issue an opinion on these new forecasts.
The forecasts analyzed by the HCFP are either one or two years ahead for annual budget bills, or medium-term (three to five years ahead) for multi-year texts (programming bills and stability programs).
When expressing an opinion on the realism of growth forecasts, the HCFP takes into account the forecasts of other bodies. It may call on representatives of all government departments with expertise in public finance, statistics and economic forecasting. It may call on outside organizations or individuals, in particular to assess the outlook for public finances.
Delivering an opinion on the consistency of the annual objectives with the multi-annual public finance objectives
The HCFP ensures that the path towards a return to balanced public finances (State, local authorities, social security) is consistent with France's European commitments.
When the Government prepares a multiannual public finance programming bill, the HCFP gives an opinion, usually in September, on the coherence between the objectives set by the draft programming law and France's commitment to ensure the structural balance of its public finances in the medium term.
According to the Treaty on Stability, Coordination and Governance in Economic and Monetary Union (TSCG), the path of the programming law is defined in terms of structural balance, i.e. after adjusting for the effects of economic fluctuations on government deficits and net of one-off and temporary measures.
In September of each year, the High Council issues an opinion on the consistency of the budget and social security financing bills with the structural balance trajectory defined in the current public finance programming law.
In the spring, it issues an opinion, as part of the bill relating to the results and approval of the year's accounts, on any discrepancies between the results of the previous year's execution and the multi-year structural balance guidelines. If a significant discrepancy is identified, the HCFP then triggers the "correction mechanism", and the Government must then explain the reasons for these discrepancies and indicate the corrective measures envisaged.
Lastly, the HCFP is required to assess the compatibility of sector-specific programming laws, which provide for the evolution of budgetary resources allocated to certain major public policies over several years (e.g. defense or research), with the multi-year expenditure targets set out in the current public finance programming law.
The HCFP is seized of all the budget bills. Its opinions concern the future (the next budgetary year or the next multiannual programming of public finances) and the past (the past budgetary year). All HCFP opinions are made public with the texts they are attached to and before their transmission to the Parliament. The President of the HCFP is usually heard by the Finance Committees of the National Assembly and the Senate before the parliamentary debate.