France: Public Finances in Catastrophic State
Following Prime Minister Michel Barnier, new Economy Minister Antoine Armand is also floating the idea of new taxes
France is facing “one of the worst public deficits in its modern history.” This was announced on Tuesday, September 24, by the new Minister of Economy Antoine Armand (pictured). He said new taxes on the “richest” and “big business” were being discussed to get French public finances in order.
Speaking to reporters, Armand said he would have a series of talks with labor leaders, heads of industrial companies, and union leaders over the next few days “in an attempt to cut public spending, which is set to reach 5.6% of France’s gross domestic product this year.” This figure is almost double the limit set by the European Union.
“Apart from one or two periods of crisis in the last 50 years, we are currently running one of the worst deficits in our history,” Armand told France Inter radio.
“We need to say clearly that the situation is very serious,” the minister said.
Armand’s warning reflects the difficulties the new French government, led by conservative Prime Minister Michel Barnier, will face as soon as it takes office. A tough clash is expected at the National Assembly when the executive presents the draft 2025 budget to lawmakers. It should contain numerous measures aimed at restoring public finances.
Barnier can count on support in the lower house of parliament from the Conservatives and President Emmanuel Macron’s much-shrunken coalition. But if the left-wing alliance of the New Popular Front (FNP) and France’s far-right Rassemblement Nationale (RN) decide to join forces, they could topple the new French government at any time with a vote of no confidence.
In an interview on Sunday, the French prime minister had already talked about a “targeted” tax increase that should primarily affect “the richest people” and “some big companies” to “straighten the ship’s course.”
Meanwhile, Patrick Martin, chairman of the French business association MEDEF, said he was “open to discussing” he idea of raising taxes. “My task is to see if any new taxes hinder French economic growth and block job creation,” Armand said. He believes the new government should completely avoid any decisions aimed at “making heavier the tax burden, which is pressing like a stone on workers and the middle class.”
