2024-10-02 12:00:38
The Barnier government in France it is called upon to find 100 billion euros over the next five years or 20 billion euros every year” to reduce the deficit to 3%.
At the beginning of the year, the previous government was talking about saving 25 billion euros to keep the budget on track. Later, the amount was revised to around 30 billion euros.
On Wednesday, the government finally announced that €60 billion should be included in the budget bill, which will be presented next week on Thursday, October 10.
This package is divided between 40 billion in spending cuts, i.e. savings, and 20 billion in revenue increases, i.e. tax increases.
This fiscal effort that the government is called upon to make Barnier is necessary to meet the new deficit target for 2025: 5% of GDP, which represents a financing requirement of around €150 billion.
It is recalled that in April, the previous government pledged, after an initial slide in the public deficit in 2023, to reach 4.1% of GDP next year.
France: The deficit is shrinking, in 5 years the reduction to 3%
However, this year, the public deficit is rising sharply once again and could reach 6.1% of GDP by the end of the year – an unprecedented peak outside the crisis period – well below the European norm of 3%.
The new government wants to reach that limit by 2029, two years behind the previous trajectory. This trajectory of restoring the accounts would not make it possible, in the short term, to reduce the debt, which would reach from 113% of GDP in 2024 to 115% in 2025.