2023-12-21 15:34:34
Brussels will monitor that France reduces its structural deficit by 0.5 points of GDP each year. 94576008/Grecaud Paul – stock.adobe.com
If the government achieves its objective of a deficit of 2.7% by the end of the five-year term, France will fall into the “preventive arm” of the stability and growth pact at this time.
Negotiated with great care by the Treasury Department in Bercy, the rules of the stability and growth pact will not require reviewing the trajectory of French debt and public deficits. The objectives presented a few weeks ago in the public finance programming law remain valid. With a deficit forecast at 4.4% of GDP in 2024, France should therefore fall into excessive deficit procedure. And stay there until 2026, the return of the deficit below the 3% floor being planned for 2027.
Brussels will then monitor that France reduces its structural deficit by 0.5 points of GDP each year, that is to say excluding the effect of the economic situation. Paris has long opposed this step, considered too high. “Finally, a compromise was found: the Commission will be able to take into account in its calculation of deficit reduction, from 2025 to 2027, the increase in interest charges on the debt following the inflationary crisis,” explains Bercy. This additional room for maneuver…
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