27/11/2024
Alexander Hurst
France might not be broke, but the state of its public finances is, well, definitely not good. Total debt stands at €3.2tn – 112% of GDP. Interest payments on that debt are the second largest public expenditure after education (which includes everything from crêche, or preschool, to universities) and are higher than the amount spent on defence. And this year’s budget deficit is projected to be 6%, three points above the EU’s 3% limit.
If it weren’t for the euro, France might very well be in the throes of a fiscal crisis – as it is, interest rates on some French debt are higher than for Portugal or Spain.
In response, the prime minister, Michel Barnier, has proposed €20bn of tax rises (on large companies and the wealthiest 0.3% of households) and €40bn of spending cuts. Yet, with both Marine Le Pen’s National Rally (RN) and the leftwing New Popular Front (NFP) opposed to different components of Barnier’s upcoming budget, the French PM might not survive a no confidence motion when he tries to push the bill through parliament before Christmas.
