Brussels approved, on Monday January 20, at the technical level, the new French budgetary trajectory of the government of François Bayrou, deeming it to be in compliance with European rules and paving the way for its validation on Tuesday by the finance ministers of the European Union (EU). .
The Commission considers that the modified trajectory “remains fully compliant with the requirements” European rules, Balasz Ujvari, Commission spokesperson for economic issues, told Agence France-Presse (AFP). The new French finance minister, 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 confirms the Commission's validation.
The European executive “confirmed at the technical level the perfect compliance of the French trajectory with the new European rules”we congratulate ourselves at Bercy. In 2025, “we are making 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.
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Objective of a return to a deficit below 3% in 2029
The European executive had already approved France's budgetary project presented by Michel Barnier's government on November 26, but the executive had 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 in the nails in 2029.
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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.
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.
