Public deficit: after the warning, Brussels approves the Bayrou government's budgetary corrections – 01/20/2025 at 12:05

France is in the trio of poor performers in the EU in terms of debt ratio.

After reprimands from the European Commission, Brussels approved at the technical level the new French budgetary trajectory of François Bayrou's government, deeming it to be in compliance with European rules and paving the way for its validation on Tuesday January 21 by EU Finance Ministers .

The Commission considers that the modified trajectory “remains fully compliant with the requirements” of European rules, Balasz Ujvari, Commission spokesperson for economic issues, told AFP. The new French Minister of Finance Eric Lombard is expected in Brussels on Monday and Tuesday for his first meeting with his counterparts from the Twenty-Seven. The Council must decide on Tuesday whether it validates the green light granted by the Commission.

The European executive approved France's budgetary project presented by Michel Barnier's government on November 26, but the French executive has since been censored and replaced by a new team. The trajectory forecast a public deficit of 5% of gross domestic product (GDP) in 2025 before a return below the authorized limit of 3% public deficit in 2029.

François Bayrou promised at the beginning of last week, without concretely detailing them, “significant savings” to reduce France's heavy debt but he decided to reduce the effort for this year compared to the previous government.

Dunce of the euro zone, with the third highest debt ratio behind Greece and Italy, France is now targeting a public deficit of 5.4% of GDP in 2025, while maintaining the objective of returning to the nails in 2029. This modified trajectory was presented to the Commission on January 16.

The European executive “has confirmed at the technical level the perfect conformity of the French trajectory with the new European rules”, we welcome at Bercy.

In 2025, “we make a lesser effort but which remains greater than the minimum provided for by the rules and this lesser effort for 2025 is fully compensated in the following years so that the total effort remains the same”, we explain. in Paris. In 2024,

the French public deficit should reach 6.2% of GDP, according to Brussels, the worst performance of the Twenty-Seven with the exception of Romania.

This major slip-up caused France to be singled out by the Commission.

Public debt above 3,300 billion euros

Since last summer, Europe's second largest economy has been part of a group of eight countries in excessive deficit procedure, with Belgium, Hungary, Italy, Malta, Poland, Romania and Slovakia.

These countries must take corrective measures to comply with EU budgetary rules in the future, or face fines. At the end of September, French public debt reached 113.7% of GDP at 3,303 billion euros.

According to Eurostat data from the 2nd quarter of 2024, six EU countries still maintain public debt above 90% of their GDP, the most important threshold of the new Stability and Growth Pact revised in 2024. With a ratio reaching 163.6% of GDP, Greece has by far the highest debt rate in the European Union, ahead of Italy (137%), France (112.2% of GDP, i.e. almost 3,228 billion euros), Belgium (108%), Spain (105.3%) and Portugal (100.6%).