French PM to propose €54B budget squeeze for 2027
Por Victor Goury-Laffont — POLITICOPolitics » POLITICO
PARIS — French Prime Minister Sébastien Lecornu said his government’s budget for 2027 will include a staggering €54 billion in savings as he attempts to contain the country’s growing deficit in a year that’s seen little to no economic growth.
In an excerpt of an interview published by French daily Le Figaro, Lecornu said that without any cuts, the budget deficit would spike to 6.5% of gross domestic product — making it all but impossible for the government to keep its promise to the European Commission to get that figure to 3% of GDP by 2029.
“These savings will serve to considerably curb the growth of spending, which has been rising inexorably year after year” due to an aging population which increases health and old-age-related costs, Lecornu added.
France has in recent years struggled to rein in spending and a debt burden that has grown from €2.3 trillion to more than €3.5 trillion and is becoming increasingly expensive to service as interest rates spike across the world. Lecornu, who vigorously opposes tax hikes on any segments of the population, said the country needs to find an additional €10 billion to finance the debt.
“The debt burden is weighing increasingly heavily on the budget equation,” he said.
Lecornu said the 2027 budget deficit target was 5%, while the hope is to contain this year’s deficit to less than 5.5%
The French government had initially planned on reducing its deficit to 4.7% of GDP this year — but acknowledged last week that the figure would ultimately land above 5%. It also cut its growth forecast for this year and next year to 0.5% in 2026 and 1% in 2027.
The government targeted €30 billion in the 2026 budget and €60 billion the year prior.
Lecornu’s minority government will present its budget bill to lawmakers in the coming weeks, but getting it passed will be difficult without a governing majority and as the spring 2027 presidential election gets closer, which will incentivize parties to stake out their positions ahead of an electoral cycle.
This story has been updated.
Fonte: POLITICOPolitics » POLITICO