France’s new Prime Minister, Michel Barnier, described the country’s budgetary situation as “very serious”, with the public deficit projected to exceed 6% of GDP by 2025, well above the EU’s 3% ceiling. The Bank of France also warned that France’s aim to return to EU deficit rules by 2027 is “not realistic.”
Issue of tax rises
Barnier, appointed amidst political tensions, has suggested tax increases to stabilize finances, a move President Emmanuel Macron has previously ruled out. Barnier emphasized the need for action over mere statements, acknowledging the severity of France’s financial situation.
With the upcoming task of presenting a 2025 budget to parliament, Barnier faces the first major challenge of his administration. The looming economic challenges require responsible action to address the growing deficit and ensure financial stability in the future.