France aims for additional spending cuts amid budget plan pressure
France’s government will seek additional savings in this year’s finance plan by canceling or reallocating €5 billion of reserve credits, Budget Minister Amélie de Montchalin announced on Wednesday.
A deteriorating growth outlook after US President Donald Trump announced sweeping trade tariffs is undermining France’s budget plans for this year, less than two months after it adopted a delayed finance bill. The government has also ramped up defence spending pledges to support Ukraine as the US winds back its defence umbrella, News.Az reports citing foreign media.
“We have €9 billion of reserves set aside and today we are activating €5 billion,” Montchalin said on RMC radio. “There is part of it that is spending that won’t happen and that will allow us to adjust — because we will have less revenue, less growth - and there is part that allows us to reallocate our choices.”
Ministers have already signaled the government will soon cut its growth forecast for this year from 0.9% currently, a move that would change the balance of the budget plans. The Bank of France last month cut its forecast to 0.7%.
Finance Minister Eric Lombard said last week that with less growth the government may have to accept a wider-than-expected budget deficit, but it should stick to its spending targets.
Government spokeswoman, Sophie Primas, said later on Wednesday France is not deviating from its commitments to bring the deficit to 5.4% of economic output in 2025 and to continue narrowing it in the following years.
“We are taking measures as the year goes on, evaluating our public finances, to keep to the 5.4% - it’s imperative for our sovereignty,” Primas said in a press briefing after the weekly government cabinet meeting.
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