2024-07-26 12:48:15
The European Union launched guidelines for a massive public deficit on Friday July 26 targeting seven member states, including France, according to a press release from the European Councilstructures representing the Seven Forces.
In addition to France, these decisions target Belgium, Hungary, Poland, Slovakia, Malta and Romania. All these countries passed last year the public deficit limit set to 3% of the gross domestic product (GDP) by the stability agreement, which also limits the debt to 60% of the GDP. They will have to take corrective measures to respect these budget rules in the future, under penalty of financial sanctions.
Moreover, Romania, which has been under such a regulation since 2019, continues to suffer its effects, “failed to take effective measures to remedy its deficiency”, specify the release button. These laws are on hold after 2020 due to the economic crisis linked to Covid and then the war in Ukraine. They repaired and re-operated this year.
Plan to present to Council by September
The highest deficits in the EU were recorded last year in Italy (7.4% of GDP), Hungary (6.7%), Romania (6.6%), France (5.5%) and in Poland (5.1%). ). The stability agreement basically provides for financial sanctions of 0.1% of GDP per year for countries that do not implement the mandated reforms, or approximately 2.5 billion euros in the case of France.
In fact, these politically explosive punishments are never used. France, whose debt reached 110% of GDP, has been in the most frequent deficit since the creation of the Euro in the 2000s, however, it came out of it in 2017.
Two weeks ago, Bruno Le Maire, the Minister of Economy of the French government who resigned, said that France must save 25 billion euros in 2024 to restore its public finances. Some 15 billion savings are already available “killed” but there is to find another 10 billion by reducing the expenses of government agencies and local authorities and through the effect of a more effective tax of rents on energy companies, according to Mr. Le Maire .
In terms of public deficit, Paris promised to return to the road in four years. Bruno Le Maire set the target of a deficit of 5.1% in 2024 (after 5.5% in 2023), while Brussels has counted on 5.3% this year and 5% in 2025. From now on, the countries targeted by disciplinary measures will have to send medium-term plans by September on how to get back on track. The European Commission will announce the evaluation of these plans in November with details on the way to return to financial health.
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