France forewarned of further government cutbacks

French government authorities have cautioned that because the country’s national budget deficit is significantly greater than expected, drastic measures are likely. France was “very far from austerity,” according to Finance Minister Bruno Le Maire, but in the short run, “we simply have to cool the machine,” he said in an interview with the newspaper Le Monde. “Growth is suffering the consequences of the new geopolitical environment and tax revenues are decreasing,” he said. “When you earn less, you spend less.”


There will now need to be additional cuts of at least 12 billion euros the year after, with Budget Minister Thomas Cazeneuve warning that the final figure could reach as high as 20 billion euros. Previously, a so-called emergency brake of cuts worth 10 billion euros ($10.9 billion) had been scheduled for the upcoming year. “We have only one decision to make: repairing the national budget. By 2027, this has to get us below a 3 percent public deficit, according to Le Maire. “A first step would be to cut public spending by 10 billion euros. We are taking this action without questioning the main public programs that President Emmanuel Macron has championed: since 2017, funding for the environment, education, health, and labor have all increased.”


This week, Le Maire also admitted to parliamentarians that France has been “addicted to public spending” for a long time. The head of the nation’s audit body, the Cour des Comptes, Pierre Moscovici, described the country’s public finances as “worrying,” citing the pandemic’s aftermath and volatile international energy prices as causes that had “propelled our public debt to historic levels” and policies carried out in the name of a “whatever it takes” political philosophy. In a speech in January, Moscovici stated, “While the effects of the COVID crisis are fading, the year 2023 did not reverse this trend.” He also added that the government’s cautious debt reduction figures “gives rise to legitimate concerns about France’s debt.”

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