PARIS (Reuters) – France must redouble their efforts to redress its public finances this year, under penalty of undergoing in the future the pressure of the financial markets, the Court of Auditors said on Wednesday.
Prime Minister François Bayrou strives to regain control of public finances after the budget deficit last year, with the effect of increasing expenditure and lower tax revenues.
Paralyzed by the holding of anticipated legislative elections convened on the initiative of President Emmanuel Macron, then by a parliament without a clear majority, France was unable to take the necessary measures to correct the deterioration of its public finances.
In order to reduce the budget deficit to 3% of the gross domestic product in 2029, in line with the requirements of the European Union, the government aims to limit it to 5.4% of GDP this year, against 5.8% last year.
The president of the Court of Auditors, Pierre Moscovici, described on Wednesday this objective as “achievable but fragile”.
“I think we have the choice between the voluntary effort now and the austerity suffered tomorrow,” he said, recalling that the financial markets could sanction any misstep by raising France’s loan costs.
François Bayrou, who has long been in charge of the risk represented by the flight of debt, said that he would present his proposals in mid-July aimed at reducing public spending by 40 billion euros next year, in order to bring the deficit to 4.6% of GDP.
His center-right government is however at the mercy of a censorship motion which could be voted by the left and the far right, as had been the case for the government of Michel Barnier during the discussions on the 2025 budget.
While the debt burden will become by the end of the decade the first French budgetary position, Pierre Moscovici stressed Wednesday that it would not be enough to respect the objective of 3% EU deficit to avoid a debt crisis.
“To truly guarantee the sovereignty of French debt, it is essential to return to a primary surplus which is the condition,” he insisted.
(Report by Leigh Thomas, Tangi Salaün, edited by Blandine Hénault)
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