Financial control is loosening slightly for the new Prime Minister, Michel Barnier. At least at the European level. France, the subject of a procedure for excessive public deficit initiated by the European Commission, has just been given a deadline to present a set of corrective measures. In July, the European executive gave Paris until September 20 to present a plan to reduce its deficit. An impossible timetable to meet for a country without a government. At France’s request, Brussels finally agreed to wait until the end of October, EU officials said Monday, September 23.
This extra month will not be too much for the new Prime Minister. France is not the only member country of the Union to violate the European treaties, which have stipulated since 1992 that the public deficit of each State must remain below 3% of the gross domestic product (GDP). In July, a similar procedure was initiated against six other countries, including Belgium, Hungary and Italy. But in France the situation seems to be out of control.
Far from falling as expected, the deficit of all the autonomous communities is expected to widen further in 2024, reaching 5.6% of GDP, according to a Treasury note prepared in July, and exceeding 6% in 2025. No one believes in the official target of less than 3% in 2027 anymore. “Instead, we must aim for 2029 and reassure both Brussels and the financial markets by showing that there is a clear path, with credible measures to stabilise the debt.” ” argues Macronist deputy David Amiel, a member of the National Assembly’s finance committee.
Ultra-busy agenda
The difficulty lies in the government adopting measures that are sufficient to really correct the accounts and that can be validated by an Assembly divided into three blocks. The new Minister of the Budget, Laurent Saint-Martin, promised “ tough decisions”, especially for “reduce public spending”.
On Sunday, September 22, on France 2, Michel Barnier opened the door to a tax increase on “ the luckiest ones » AND “some big companies”. “We are willing to discuss an increase in corporate tax” Medef president Patrick Martin responded in an interview with Parisianthe next day. But by imposing several strict conditions, in particular that this effort “it does not stop the dynamics of investment and job creation”The timetable remains very tight: in order to meet the legal deadlines, the Government should have already sent its draft budget to the Higher Council of Public Finances as early as 13 September.
