EU approves French budget plan despite deficit overshoot
BRUSSELS — EU finance ministers on Tuesday formally approved France’s multi-annual budget plan, despite its scaled-back ambitions to rein in the country’s ballooning budget deficit this year.
Brussels has formally rebuked France for breaking its budget rules, with a deficit estimated at 6.1 percent of GDP in 2024 — far above the three-percent level to which eurozone members are supposed to adhere.
Prime Minister Francois Bayrou’s month-old government is promising to wrench the deficit down to 5.4 percent this year, with the goal of getting back under three-percent in 2029.
The target for 2025 is less ambitious than that set by Bayrou’s predecessor Michel Barnier who had vowed to cut the deficit to five percent.
But the immediate priority for France’s EU partners appears to be shoring up Bayrou’s fragile government to help stabilize the EU’s second biggest economy, in crisis since President Emmanuel Macron called snap elections last June.
Barnier’s government — pieced together after months of political wrangling — collapsed in December amid a standoff over budget austerity measures.
France’s fourth prime minister in a year, Bayrou still faces a huge challenge to get domestic agreement on his long-overdue budget plan for 2025 — with Marine Le Pen’s surging far-right National Rally waiting in the wings.
Ambitious
The green light from EU ministers follows that already granted by the European Commission.
Speaking for the EU executive, Trade Commissioner Valdis Dombrovskis said the French draft budget “preserves the same ambitious level of overall fiscal effort over the adjustment period.”
“This budget will require efforts from everyone, but it’s necessary in the interests of our country,” French Finance Minister Eric Lombard told reporters after meeting his counterparts in Brussels.
France’s public deficit for 2024 is the highest in the European Union with the exception of Romania.
It also has the third-highest public debt-to-GDP ratio in the bloc, after Greece and Italy — reaching 113.7 percent at the end of September.
Since the summer, France has been part of a group of eight countries facing the EU’s excessive deficit procedure, along with Belgium, Hungary, Italy, Malta, Poland, Romania and Slovakia.
EU states approved the budget plans of 21 of the EU’s 27 members on Tuesday. Six others, among them Germany, are behind schedule and will be assessed at a later date.
