Like six other EU member states, France must take corrective measures to comply with European Union budgetary rules in the future, or face financial sanctions.
The European Commission confirmed on Tuesday that it was discussing with the French government a new date for sending the country’s public deficit reduction plan within a “reasonable” timeframe, confirming the French request for a postponement.
The Commission “will agree” with member states requesting an extension “on a new deadline that will allow for a timely assessment of their plan, taking into account all relevant factors,” a spokesperson explained.
The Twenty-Seven are supposed to send their multi-annual budget plan to Brussels by September 20. France is currently waiting for a new government after the legislative elections in July and the appointment of Michel Barnier as Prime Minister.
Since the end of July, it has been the target of a European procedure for excessive deficit, like six other EU member states. These countries exceeded last year the limit on public deficits set at 3% of gross domestic product (GDP) by the Stability Pact, which also limits debt to 60% of GDP. They will have to take corrective measures to comply with the budgetary rules of the European Union in the future, under penalty of financial sanctions.
Only 10 billion euros of savings materialised before July
Paris has promised to return below the 3% threshold in 2027, a target considered implausible by many experts. The deficit reached 5.5% of GDP last year. The unexpected surge in local authority spending, coupled with disappointing tax revenues, could push the public deficit to 5.6% of GDP this year, or even 6.2% in 2025, according to budget documents sent by Bercy to parliamentarians. “We confirm having received the request” for a postponement from the French government, explained a Commission spokesperson.
“As with all Member States, we remain engaged in close technical dialogue with the French authorities with the aim of ensuring that the (budgetary) plans meet all the requirements set by legislation,” he added.
EU rules allow for a postponement for a “reasonable period” beyond the deadline. “It is clear that there is a need for budgetary adjustment in France and in other countries with high debt,” European Commissioner for the Economy Paolo Gentiloni said in July. In France, Finance Minister Bruno Le Maire had announced 25 billion euros in savings this year, but only 10 billion were delivered before the early parliamentary elections.
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