Not everything in public accounts is transparent. Alongside the reported debt and deficits debated in parliament, the government makes more discreet commitments by granting guarantees to companies, banks, or projects deemed strategic. These commitments do not result in any immediate disbursements and often remain largely out of the media spotlight. Yet, they constitute contingent financing whose impact can be considerable when circumstances deteriorate.

Sovereign guarantees are primarily intended to facilitate investment. By acting as guarantor, the state enables a project to borrow at a lower cost or access financing that would otherwise be unavailable. Transport infrastructure, energy, public-private partnerships, and struggling public enterprises frequently benefit from this implicit support. As long as the expected revenues materialize, the guarantee never materializes, and the operation appears to be a win-win situation.

This apparent free service, however, masks a latent budgetary risk. A guarantee is not a subsidy, but a promise of payment in the event of default. When the economic climate changes, demand falls, or the project is poorly designed, this promise can be called upon. The contingent commitment then transforms into explicit debt, often in an emergency and without having been fully anticipated in the budgetary trajectory. The International Monetary Fund emphasizes that these guarantee calls are among the most frequent sources of sudden slippages in public finances.

International experience is replete with examples where these mechanisms have placed a heavy burden on budgets: banking crises, loss-making highway concessions, and over-indebted energy companies. In each of these cases, the state had to honor its commitments to avoid systemic collapse or the disruption of essential services. The World Bank points out that in some emerging countries, the stock of public guarantees represents several percentage points of gross domestic product, without being clearly reflected in the official debt.

Beyond their potential cost, sovereign guarantees pose an incentive problem. When a project benefits from implicit state support, the risk may be underestimated by investors and lenders. This partial socialization of losses encourages less rigorous decision-making, with project selection sometimes dictated by political rather than economic considerations. The taxpayer then becomes the insurer of last resort for choices they do not control.

Faced with these dangers, many countries are seeking to better regulate these commitments. The publication of budgetary risk reports, the systematic evaluation of guarantees provided, and the establishment of legal ceilings are among the best practices recommended by international institutions. The objective is not to ban these instruments, but to measure their expected cost and ensure transparency.

Sovereign guarantees thus serve as a reminder that fiscal stability depends not only on visible spending and collected revenue. It also hinges on those unspoken promises that lie dormant in the appendices of finance laws. As long as they remain uncalled upon, they reassure and stimulate investment. When they are called upon, they brutally reveal their true nature: a discreet gamble, the cost of which can prove heavy for public finances.