The EU launches fiscal rules with doubts about the direction of the French economy

The EU launches fiscal rules with doubts about the direction of the French economy
The EU launches fiscal rules with doubts about the direction of the French economy

Luxembourg, Oct 7 (EFE).- The European Union is on the verge of starting its first budget cycle under the new fiscal rules that limit the countries’ public deficit and debt and will do so with doubts about the direction of the French economy , which will close this year with a gap of more than 6% of GDP.

Member States have until October 15 to send their 2025 budget drafts to Brussels, the first that they will have to prepare with the new framework, and the new French Executive led by Michel Barnier has promised that it will clamp down on public accounts.

This is, precisely, the message that the new French Minister of Finance, Antoine Armand, conveyed to the rest of the finance ministers of the eurozone (Eurogroup), to whom he has communicated his plans to reduce the deficit to 5% in 2025 and take it below the 3% threshold in 2029.

“It is a serious, credible and ambitious trajectory for our country and it completely respects the European budgetary rules,” Armand claimed to the media before participating in his first Eurogroup meeting.

The Commissioner for Economy, Paolo Gentiloni, responsible for negotiating with governments the adjustment paths of each of them, was optimistic and described as “promising” the first contacts he has had with both Barnier and his economic minister, who They conveyed their “strong commitment” to compliance with the rules.

The Italian also pointed out that Brussels has “experience” in working with governments with “weak majorities” like the French one, while recalling that the institution “does not ignore the political difficulties” in Paris to carry out the accounts.

Doubts about France – a country against which the Commission opened a file for excessive deficit last June – were also a source of question for the German Finance Minister, Christian Lindner, who preferred to meet with his French counterpart before assessing his budget plans.

However, the German liberal was “concerned” about the budgetary situation of “some Member States”, while calling for them to be “ambitious” to “put public finances in order”, adopt structural reforms and, if necessary , make “unpopular decisions.”

The Minister of Economy, Commerce and of Spain, Carlos Body, said that the Spanish Government will delay the presentation of the draft budget for 2025 beyond the scheduled date of October 15, although at that time it will submit the structural fiscal plan in the middle term, which will determine the budget adjustment path for the coming years.

Body argued that Brussels prefers that governments not send budget extensions this year without new economic policy measures, so Spain will not present its budget plan until it has at least a General State Budget project (PGE).

“We still have time. Here the European Commission also has until the end of November to make an evaluation of the medium-term structural fiscal plans, that is the environment in which we are moving,” he indicated.

Asked about this delay, Commissioner Gentiloni said that the European Commission “has been flexible with the deadlines but there is a limit to flexibility.”

Community sources explained that the Community Executive has effectively asked countries not to send it budget drafts without policy changes, but still the deadline to do so is October 15.

While the Spanish idea of ​​submitting it later may be acceptable in some circumstances, Brussels still needs to discuss it further with the Spanish authorities as it needs to check how the budget would interact with the medium-term fiscal path. EFE

(More information about the European Union at euroefe.euractiv.es)

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