France’s budget deficit gap with EU is unacceptable – audit court

France’s state auditor, Cour des Comptes, raised concerns over the country’s budget deficit compared to other European Union (EU) countries, which reached 5.5 per cent of GDP in 2023, significantly above the 4.9 per cent target.

Auditor Pierre Moscovici attributed the shortfall to lower-than-expected revenues, discretionary tax cuts, and a lack of structural savings.

He emphasised the need for the next government to create a coherent and credible financial plan, contrasting France’s situation with other EU countries that are successfully reducing their deficits and debts.

The warning comes amid political uncertainty following a hung parliament election, which has heightened concerns about fiscal stability.

Although market tensions have eased, a left-wing coalition advocating for increased public spending has emerged as a significant force, having won the most seats.

Finance Minister Bruno Le Maire has expressed openness to consensus on specific initiatives but cautioned that the left’s proposals could threaten fiscal consolidation efforts.

Moscovici warned that any future missteps in spending or revenue could derail long-term financial plans, stating, “The next trajectory must be coherent and credible, which means being based on realistic savings plans and documented revenues.”

Attribution: Bloomberg.