France among the bad students according to Brussels. The European Commission estimates that Paris, as well as three other countries (Belgium, Croatia and Finland) “risk not being in line with the EU budget recommendations” for next year, due to public spending excessive.
These four countries must “reduce spending” to respect European limits, declared this Tuesday, November 21, the Vice-President of the Commission, Valdis Dombrovskis, during a press conference. Brussels communicates every six months on the budgetary trajectories of the 20 member countries of the euro zone. She published her opinion on the draft budget for 2024 on Tuesday.
“Substantial progress made”
In Paris, the Ministry of Finance nevertheless wants to be calm. France is “in line” with the reduction of the public deficit, expected at 4.4% of gross domestic product (GDP), after 4.8% in 2023, we explain at Bercy. Insufficient for the moment: the deficit must normally be reduced to 3% from 2027, the limit set by the Stability Pact, the budgetary corset imposed on countries sharing the single currency.
Brussels also wanted to highlight the “substantial progress made with regard to the structural elements of the budgetary situation in France”, welcomed the European Commissioner for the Economy, Paolo Gentiloni. Within the euro zone, no draft budget for 2024 presents “a serious risk” of non-compliance with the Pact, the Commission also welcomed.
Paris also believes that the upward revision this fall of growth prospects for France should modify the assessment of the evolution of its expenditure, an element not taken into account in the opinion published Tuesday and which, according to Bercy, would put the country back on track.
Towards possible infringement procedures
EU budgetary rules were deactivated at the start of 2020 to avoid a collapse of the European economy hit by the Covid pandemic. It was a matter of temporarily letting spending go to support growth. This exceptional measure was extended until the end of 2023 due to the repercussions of the war in Ukraine, but the Stability Pact will be reactivated on January 1.
This set of rules, which also imposes a public debt ceiling of 60% of GDP, is currently being reformed and a consensus between member states on the renovated Pact is hoped for in December. In the future, control will focus on changes in spending, an indicator considered more relevant than the deficit and already highlighted in Tuesday’s publication.
The Commission has warned that it could launch infringement procedures for excessive deficit next June against countries having exceeded 3% of public deficit this year. In addition to the four countries singled out on Tuesday, Paolo Gentiloni stressed that nine other member states were “not completely in line” with the recommendations, including Germany which is called, like France, to remove the measures “as soon as possible”. aid adopted to reduce the energy bills of households and businesses.