French Economy Minister Eric Lombard, who has eliminated the 2026 budget of the euro zone’s second-largest economy after lawmakers finally passed their financial plan for 2025 earlier this month, will prove a ” Hard” mission. try.
Lombard said France has drawn a trajectory to reduce its public deficit with the goal of reaching 5.4% of the country’s GDP by 2025 and dropping below 3% in 2029. Under EU spending regulations, member states must keep their deficits below 3% of GDP.
“In 2026, yes, it’s a very demanding budget as we will continue to reduce the deficit, of course, below 5.4%, and probably below 5%,” the Economy Minister told CNBC on Monday, noting that the end goal has not been set yet Stone.
“We will work with all political parties…discuss, talk with us. We will also work with unions, employers to reach a consensus on key policies on the country’s key and policies that we can adjust to make our spending in 2026 reduce.”
In recent months, there has been a lack of budgetary and broader instability in French politics. Lombard acknowledged the “negative impact on growth” and expressed hope that investors will now return to France.
The country’s economic performance collapsed The fourth quarter contracted by 0.1%from the first three months to 0.4%, the French Bank expects 0.1-0.2% of national GDP to grow by 0.1-0.2% in the first quarter. According to its latest monthly business survey. International Monetary Fund expect During the full year 2025, the French economy will grow by 0.8%.
Pension reform
The budget is now completed, with the focus reattributed to the fate of the controversial (and highly competitive) pension reform in 2023 that seeks to gradually bring retirement age to the death of French President Emmanuel Macron From 62 to 64 years old.
France’s new Prime Minister Francois Bayrou said the legislation could return to the agenda – providing a test coke test for those watching France’s efforts to curb its deficit.
“I totally believe in the representatives of workers and employers,” Lombard told CNBC’s Reed. “So they know their responsibility is to find adjustments… They have three months to do that, and I believe they can achieve it.” The agreement, if they reach an agreement, will be placed in Parliament hopes to become law immediately this year.”
Fitch earlier this month created a negative tone for the potential abolition of the legislation.
“In the medium term, any rollback of reforms can remove some planned fiscal consolidation and a moderate negation of the medium term fiscal outlook. Fitch warns February 10.
