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France will need to boost deficit reduction plans

The next French government will need to revise current budget deficit reduction plans. And that is after a presidential election in April. This is to ensure that France does not fall further behind other European countries. President Emmanuel Macron’s government currently plans to cut the public sector budget deficit below an EU ceiling of 3% of gross domestic product in 2027.

The Cour des Comptes criticised the government’s plans, saying that they risked fuelling divergences within the euro zone. This is mainly with more fiscally conservative countries such as Germany. Also, it stated that the next budget bill, which is to be presented in autumn 2022 after the spring elections, should revise the ambition on the public finances. Mainly this is as regards the economic and health situation and the plans of their European partners. The call follows a warning from the International Monetary Fund. The audit office called for a stiff dose of realism when the deficit-reductions plans were revised after the election.

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