France is experiencing an unrelenting slide towards financial deficit.
France finds itself in a more dire financial situation than initially anticipated. Budget Minister Laurent Saint-Martin estimated in the parliamentary budget committee in Paris that the budget deficit could surpass six percent this year. "Definitely, our nation's fiscal health is concerning."
The primary causes contribute to insufficient tax earnings and extravagant public spending. Moreover, the prolonged political gridlock in France has prompted economic entities to adopt a cautious, observe-and-act approach.
The European Commission is currently implementing deficit procedures against France as a result of excessive debt. Given this, the conservative prime minister, Michel Barnier's new administration, faces mounting challenges in achieving its objective of decreasing the deficit below the European limit of three percent by 2025. "We'll need to put in a substantial amount of work by 2025," explained Minister Saint-Martin. Initially, it's crucial to slash expenditures, and contingently, contemplating tax hikes might become an option.
Preparations are being made to unveil a budget draft on October 9, as the Minister mentioned. Due to the intricate process of electing a new prime minister following the early parliamentary elections and the formation of the government, there is a pressing need for time. By October 31, Paris must then submit a plan to the EU Commission for strengthening its financial stability. The former government originally aimed for a budget deficit of 5.1 percent for 2024, but later adjusted it to a 5.6 percent rate.
The European Commission's deficit procedures against France highlight the country's financial struggles in Europe. Despite the new conservative prime minister Michel Barnier's efforts, France's financial situation in France, specifically the budget deficit, remains a significant concern.
