The French government has asked the European Commission for an extension of the deadline for sending its plan to reduce the public deficit, which was initially due by September 20, the Ministry of Finance announced on Saturday, September 7, confirming information from The Tribune Sunday.
“France has requested an extension” pour “ensure consistency between the plan and the draft finance bill for the year 2025”the Ministry of Economy told the weekly, without specifying the length of the delay. Asked by Agence France-Presse (AFP), Bercy confirmed the information.
Targeted since the end of July by a European procedure for excessive deficit, like six other member states of the European Union, France must send, by September 20, to Brussels its plan for reducing the public deficit until 2027, date by which it should normally be below the 3% of the gross domestic product (GDP) authorized. According to European texts, the deadline is “unless the Member State and the Commission agree to extend this period for a reasonable period”.
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Countries are required to take corrective measures to comply with European budgetary rules in the future, under penalty of financial sanctions. However, in France, 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 to 6.2% in 2025, compared to 5.5% in 2023, according to budget documents sent this week by Bercy to parliamentarians.
A “reversible” 2025 budget
The outgoing government has prepared a 2025 budget for its successor “reversible” which provides for State expenditure strictly equivalent to that of 2024 (492 billion euros), but distributed differently between the ministries.
The Minister of Economy and Finance, Bruno Le Maire, had announced 25 billion euros in savings this year, but only 10 billion were implemented before the early legislative elections.
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“A return of the deficit below 3% by 2027”as planned in the multi-annual trajectory of public finances transmitted by France to Brussels in the spring, “would mean saving around 110 billion by 2027”warned the Treasury General Directorate in a note dated July and consulted by AFP.
The President of the Court of Auditors, Pierre Moscovici, also estimated this trajectory “lapsed”, “became unlikely and not necessarily desirable”. “To achieve this, we would need to save around a hundred billion euros over three years.”he said in an interview with Parisian published Saturday. “It is brutal, it is politically difficult to do, socially unacceptable and economically hardly coherent.”he said.
