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France’s new finance minister, Antoine Armand, will, on Monday, seek to convince his EU counterparts that Paris is committed to controlling its ballooning deficit and complying with the bloc’s budgetary rules.
Armand will present the national budget on Thursday, which the French government hopes will address the country’s “colossal” debt through a combination of spending cuts and new taxes.
On Monday, Armand travelled to Luxembourg to reassure his eurozone counterparts of France’s priorities, including efforts to bring the deficit under control.
“We have prepared a budget to strengthen the country’s financial and national sovereignty,” Armand stated during a media briefing, hours before his first meeting with EU finance ministers. He emphasised that adhering to EU rules is “a matter of international credibility.”
Armand must also convince financial markets that his goals are achievable.
In July, Brussels reprimanded France for exceeding the budgetary rules, initiating a formal procedure because its deficit surpassed the eurozone’s three per cent limit. France is required to submit a multi-year plan to reduce its public deficit, but a delay was granted after the formation of a new government following snap elections. Paris must now submit its budget plan to the European Commission by 31 October.
‘Sword of Damocles’
Armand expressed confidence in France’s efforts to reduce the deficit in line with EU regulations.
“Our goal is to bring our deficit below the three per cent mark by 2029,” he said, which extends the timeline by two years compared to his predecessor, Bruno Le Maire’s, earlier 2024 target. He reiterated France’s aim to lower the deficit to five per cent by next year.
“The prime minister has given me a very clear mandate: to defend French and European interests globally in economic and financial matters,” Armand added.
Balancing the need to satisfy both markets and Brussels, while avoiding excessive hardship for citizens and businesses, will be challenging.
Time is, however, of the essence. French Prime Minister Michel Barnier described the nation’s debts—exceeding €3.2 trillion, more than 110 per cent of GDP—as “the true sword of Damocles… hanging over France and every French citizen.”
EU ‘falling behind’
Addressing broader concerns, Armand reiterated France’s determination to push forward on key priorities, including enhancing Europe’s competitiveness—a major concern for European leaders. He pledged to “personally” engage with these issues.
“The EU is falling behind China and the United States in strategic sectors,” Armand warned, referencing reports from former Italian premiers Mario Draghi and Enrico Letta that raised alarms about Europe’s economic future.
“We must not resign ourselves to this fate,” he stressed, calling for deepening the single market and strengthening European industrial policy.
AFP