Two months before the European elections, the announcement comes at an extremely bad time. For the current year, the government reassesses its deficit forecast to 5.1% of gross domestic product (GDP), compared to 4.4% so far. This implies triggering 10 billion euros of additional savings in 2024, after 10 billion euros of credit cancellations were already made in February. Bad news for the majority, who have been torn apart for several days over the country’s financial situation and the corrections that should be made.
A sign of the prevailing nervousness, the finalization of the “stability program” was tense. So much so that the High Council of Public Finances, which must give its opinion, did not receive the complete document on Tuesday evening, as should have been the case. Only the macroeconomic scenario was transmitted, causing annoyance and dismay within the body.
Public finance data would only have been communicated on Wednesday, which Bercy denies. The stability program, which sets out the growth forecasts and the financial trajectory that France is setting for the coming years, will be presented to the Council of Ministers on April 17, and sent to the European Commission in the coming weeks.
The public deficit is one of its data. The Minister of the Economy pleaded for 4.9%, even if it meant adopting an amending finance law this summer. But the Elysée and Matignon, after a quick tour of the ministries, realized that the step was too high, without drastic cuts. So it’s 5.1%.
“Credible” commitments
In recent weeks, concerns about the government’s ability to bring the deficit below 3% of GDP by 2027, as promised, have become more acute. It was necessary to record a public deficit in 2023, much higher than expected: 5.5%, compared to 4.9%, according to data published on Tuesday March 26 by the National Institute of Statistics and Economic Studies, responsible for France. to measure it. Public debt stood at 110.6% of GDP.
Bercy was also forced to adjust its growth forecasts for 2024 downward: 1%, compared to 1.4%, which many economists still consider too optimistic. The situation of public finances has deteriorated significantly since the fall, notably due to a slowdown in the economy, marked by the gradual increase in interest rates, and much lower tax revenue than expected – 21 billion euros less than expected.
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