Brussels gives its approval to France's new budgetary project

For Brussels, France is still on target. The European Commission has announced that France's budgetary trajectory, modified by the Bayrou government, « remains fully compliant with requirements » European rules. This Tuesday, the European Council will have to say whether it validates the green light granted by the Commission.

Dunce of the euro zone, with the third highest debt ratio behind Greece and Italy, France presented a new budgetary trajectory in Brussels on January 16. The country is now targeting a public deficit of 5.4% of GDP in 2025, while maintaining the objective of falling below 3% in 2029.

To achieve this, François Bayrou promised, 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.

As a reminder, the initial trajectory predicted a public deficit of 5% of gross domestic product (GDP) in 2025. The Barnier plan was even approved on November 26, but the French executive has since been censored.

For its part, Bercy is pleased to note that the European executive « confirmed at the technical level the perfect compliance of the French trajectory with the new European rules. 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.

It is in this context, rather favorable for France, that the new French Minister of Finance, Éric Lombard, is expected in Brussels this Monday and Tuesday for his first meeting with his counterparts from the Twenty-Seven.

Despite this respite granted by Brussels, the French public finance situation remains very difficult. In 2024, the French public deficit is expected to reach 6.2% of GDP, according to the European Union, the worst performance of the member states with the exception of Romania. At the end of September, French public debt reached 113.7% of GDP at 3,303 billion euros.

This major slip-up caused France to be singled out by the Commission. Since last summer, France has been part of a group of eight countries in excessive deficit procedure, with Belgium, Hungary, Italy, Malta, Poland, Romania and Slovakia. All must take corrective measures to comply with EU budgetary rules in the future, or face fines.

Obviously, the government of François Bayrou was able to convince the European Commission that it was going to take strong measures to correct the drift in French accounts.