French new deficit cutting plan more realistic, needs detail, EU officials say

2/10/2024 7:23

        France's new, slower deficit reduction path announced on Tuesday is not ambitious but is more realistic than the previous one, though much will depend on what reforms Paris will enact to make it credible, euro zone government and EU officials said.
        
        French Prime Minister Michel Barnier told parliament he planned to reduce the country's budget deficit to 5% of gross domestic product in 2025 from around 6% this year and cut it below the EU ceiling of 3% in 2029, two years later than the previous French government had planned.
        
        "So is it ambitious? No. Is it legally viable – most likely yes," one senior euro zone government official said. "I do not expect this to be an easy ride for France - lots of capitals will be looking closely into the credibility of the plan."
        
        Under the EU's new fiscal rules, France, as well as all other EU countries, has to submit to the European Commission itsfour- to seven-year plans of reforms, investment and debt reduction to put debt on a sustainably downward path.