France Announces New Measures to Address Public Debt
French Economy and Finance Minister Eric Lombard announced today a series of stringent measures aimed at addressing the country’s significant public debt, currently at a record €3.3 trillion. The announcement comes as new data indicated a staggering €40.5 billion increase in debt during the first quarter of the year, prompting swift action from the government, reports 24brussels.
Among the measures planned are reductions in healthcare expenditures, specifically in the reimbursement of medications and medical services. Additionally, government ministries will be instructed to tighten budgets as part of broader efforts to control state finances, which operate independently from the social security budget.
Despite ongoing challenges, the government aims to reduce its budget deficit from 5.8 percent of GDP in 2024 to the EU-mandated limit of 3 percent by 2029. Prime Minister François Bayrou has pledged to identify an additional €40 billion in savings for the upcoming budget. However, concerns persist regarding the longevity of his minority government amid growing political tensions.
Bayrou’s government recently lost the support of the center-left Socialist Party, which initiated a no-confidence motion following the collapse of a high-profile retirement reform agreement. Analysts suggest that while Bayrou is likely to survive this immediate challenge, the political landscape remains precarious as the far-right National Rally has signaled potential willingness to challenge his administration in the fall during budget discussions for 2026.
In the face of accumulating pressure, the French government showcases a firm resolve to implement necessary changes despite the complex political environment. As officials grapple with public finance management and strive to stabilize the economy, the upcoming political maneuvers will be crucial in determining the country’s fiscal future.
