France’s public finances and growing deficit are a cause for concern and leave the country “dangerously exposed” in the event of a new macroeconomic shock, the national state audit agency said today.

This agency, known as the Cour des Comptes, reiterated that it is very important for France, the second largest economy in the euro zone, to reduce its public deficit.

“Due to delays in implementing real structural reforms, the cost of public debt, exacerbated by recurring deficits and the burden of those deficits, has become increasingly expensive,” he said.

This “has hampered other spending, hinders the opportunity for investment and leaves the country dangerously exposed in the event of a new macroeconomic shock,” the agency added. He also stated that France’s public financing programs do not sufficiently take into account costs related to policies aimed at protecting the environment, such as greater use of renewable energy.

Last month, the European Commission cleared the way for excessive deficit proceedings against seven member states, including France.

France had a budget deficit of 5.5% of GDP in 2023, up from 4.8% in 2022 and above the 3% limit set by the EU. Public debt was 110.6% of GDP in 2023. The Commission expects that it will increase to 112.4% this year and 113.8% in 2025 while the EU limit is 60%.