EU supports France's budget plan amid skepticism over its credibility

On November 26, 2024, in a politically charged environment, the European Commission gave its support to the French government's budget proposal led by Prime Minister Michel Barnier. This approval is framed within the context of the EU's stress on adhering to budgetary regulations among its member states, allowing for a gradual reduction of France's public deficit until 2029. Originally aiming for a deficit below 3% of GDP by 2027, this target has now been extended to 2029 due to the current economic challenges faced by France. The deficit is projected to decline from 6.1% of GDP this year to 2.8% by the specified deadline, but public debt is expected to rise significantly during the same period, increasing from 112.9% in 2024 to 115.8% in 2029, well above the 60% benchmark established by EU regulations. The approval of this budget proposal highlights the complexities of fiscal governance within the EU and reflects ongoing challenges within the French economy. In the face of a likely increase to 6.2% in the current fiscal year and skepticism surrounding predicted fiscal targets for 2025, bureaucratic leniency was shown towards the French plans, compared to stricter standards often applied to other member states like Italy and Greece. While the French government proposes a €60 billion budgetary effort, involving both tax increases and spending reductions, doubts linger regarding the implementation and effectiveness of these measures given historical trends of unmet fiscal commitments across Europe. This leniency elicited reactions from various EU officials and diplomats, who expressed caution about the viability of these fiscal goals. Concerns were raised that both France and its neighbors have historically struggled to comply with financial promises, casting further doubt on the realism of Barnier's proposed budgetary strategy. As skepticism envelops discussions in both Paris and Brussels, many question whether this newly endorsed plan will materialize or if it reflects outdated goals in the face of contemporary economic realities. Finally, this situation illustrates the dynamic between national policy-making and EU oversight, accentuating ongoing tensions between EU authorities striving for fiscal discipline and member states facing economic pressures. The future trajectory of France's public finances will be closely watched by both national leaders and EU analysts, particularly given the looming deadline of 2029 and the ramifications of any potential deviations from the agreed-upon fiscal framework.