CashNews.co
The worse-than-expected figures mean Mr Macron will have to push through heavy cuts to public services or hefty tax increases in order to meet his goal of bringing the deficit below the EU’s target by 2027.
Paris has already set out plans to slash spending by €20bn next year, following cuts on a similar scale this year.
Pushing through budget cuts on this scale is likely to prove difficult, given the French public’s fierce protectiveness of public benefits, their propensity to strike and the political gridlock in the country.
The president is expected to name a new prime minister this week, two months after his ill-fated decision to call a snap election. Questions remain over the viability of a new administration, which risks being unable to pass a budget for next year.
Gilles Moëc, group chief economist at AXA Investment Managers, warned: “Whatever the name of the new prime minister, policymaking is likely to remain delicate in Paris.”
France’s profligacy has already prompted credit rating downgrades and Paris has received a slap on the wrist from Brussels after being placed into the EU’s excessive deficit procedure.