France to present EU-compliant budget amid deficit concerns

By Aya El Sayed On Oct 7, 2024

Newly-appointed French Economy, Finance and Industry Minister Antoine Armand arrives to attend the first weekly cabinet of the new government at the Elysee Palace in Paris, France, September 23, 2024. © Sarah Meyssonnier, Reuters

French Finance Minister Antoine Armand announced that the government will present a budget this week that aligns with European Union (EU) rules, aiming to reassure both EU partners and financial markets about France’s growing deficit.

Speaking ahead of a meeting with euro-area finance chiefs in Luxembourg, Armand emphasised that the budget would be in line with new EU fiscal guidelines, which France helped shape.

The announcement follows concerns over France’s delay in reducing its budget deficit to below the EU limit of 3 per cent of GDP.

The new government, appointed after snap elections in July, now aims to meet the target by 2029 instead of the previous goal of 2027. Plans for next year include €60 billion ($65.8 billion) in spending cuts and tax increases to reduce the deficit to 5 per cent of GDP from around 6.1 per cent in 2024.

Armand stressed that the budget’s goal is to bolster the country’s financial sovereignty while maintaining international credibility by adhering to the fiscal commitments set by the EU.

Attribution: Bloomberg

Subediting: M. S. Salama