Let’s not add a European crisis to a French crisis. In the midst of a heated political debate in Paris, the European Commission decided, on Tuesday, November 26, to support the budget project defended by Michel Barnier’s government, within the framework of its examination of all the budgets of the Twenty-seven. Brussels also welcomed the French debt reduction trajectory, presented within the framework of the new stability pact, renewed in spring 2024. A significant indulgence, although the first steps planned by Michel Barnier to clean up public accounts are considered , in France, increasingly less likely.
The European executive considers “credible” the medium-term plan presented by the Prime Minister for the next seven years, and accepts that, given the current French difficulties, the objective of reducing the deficit below the threshold of 3% of gross domestic product (GDP) be postponed from 2027 to 2029.
According to the document sent by France on October 31, the deficit of the State, local communities and Social Security, expected at 6.1% of GDP this year, would progressively decrease to 2.8% in 2029, respecting finally the European standards. At the same time, French public debt would continue to increase, going from 112.9% of GDP this year to 115.8% in 2029. Again far from the 60% ceiling provided for by European treaties.
“Complies with the recommendations”
As for seven other countries, including Italy and Greece, the community executive considers the plans presented by France “In line with the recommendations, because your net spending must be within the limits.” The Commission, on the contrary, rejected its ruling on the Netherlands, one of the most frugal countries in Europe, which already respects the 3% deficit as well as 60% debt…
In its copy sent to Brussels, France plans to make a budgetary effort of 60 billion euros, in the form of spending cuts and new taxes, and promises to reduce the deficit to 5% of GDP in 2025. “On paper, these goals are perfect and successful.confides a European diplomat. We will have to see reality, because until now France, but also other countries like Italy, have never managed to fulfill their commitments. »
The question seems all the more justified since, both in Paris and Brussels, many doubt the credibility of the official promises and already consider the plan presented in Brussels less than a month ago obsolete. According to the European Commission itself, the French public deficit is likely to reach 6.2% instead of 6.1% of GDP this year. And, by 2025, no one believes in the 5% deficit promised on paper.
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