French government scales back plans to reduce deficit in 2027
Maintaining the deficit at 5 percent next year makes it less likely that Paris will meet its EU commitments.
On Thursday, French Economy Minister Roland Lescure announced that the government's aim for the upcoming budget was to maintain a "stable public deficit." Initially, France had targeted a 2027 deficit below 5 percent of its GDP, with a more ambitious goal of 4.9 percent. However, recent economic forecasts and internal division within the parliament have made the deficit reduction path increasingly challenging.
During a high-profile business leaders' gathering organized by Medef, Lescure emphasized the government's focus on providing stability in the months ahead, without any tax hikes and through further belt-tightening measures. He also confirmed the government's exploration of a partial pension freeze as a way to keep the deficit under control.
The French government is now navigating a difficult budget season, with a stalled parliament and opposition parties showing no signs of cooperation as the 2027 presidential election campaign gains momentum. Leftist candidate Jean-Luc Mélenchon has already signaled his party's intention to initiate a no-confidence vote over the budget bill.
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