France's 2023 budget deficit to miss 4.9% target, Le Maire says

He did not specify where the final 2023 budget deficit would end up. On Feb. 18, Le Maire said the government would make sure France remained on track to meet its target of reducing the 2024 public deficit to 4.4% of GDP.

France will miss its target of reducing the 2023 budget deficit to 4.9% of its gross domestic product and will need additional spending cuts, French Finance Minister Bruno Le Maire told the Le Monde newspaper in an interview published on Wednesday.

"Due to lower tax revenues in 2023, we will be significantly above the 4.9% target. These 10 billion euros (spending cuts) are not a matter of shaving off some costs, but an emergency brake," Le Maire said, referring to a 10-billion-euro ($10.86 billion) spending cuts package announced last month. He did not specify where the final 2023 budget deficit would end up.

On Feb. 18, Le Maire said the government would make sure France remained on track to meet its target of reducing the 2024 public deficit to 4.4% of GDP. Le Maire said that if the 10 billion euro spending cuts package does not suffice, the government would review the 2024 budget this summer, and he confirmed that the 2025 budget would have to include at least 12 billion euros in savings.

He said it was urgent to reform unemployment insurance if France wants to achieve full employment, adding that France has the longest unemployment benefit period among developed countries, at eighteen months. Le Maire reiterated that the government remained committed to trim the state deficit to below 3% of GDP by 2027.

"Let's look beyond that, and aim for a balance in public finances that we haven't seen since 1974," he said. The government would not increase taxes, he said, despite the hundreds of million euros of new support measures for French agriculture announced by President Emmanuel Macron in order to appease a farmers' revolt.

Asked about state utility EDF's problems with its nuclear newbuild programmes, he said "EDF must learn to keep to its costs and schedule" for the six new nuclear reactors France plans to build. He said he would be taking part in EDF's next Executive Committee meeting at the end of March to ensure that message is understood. ($1 = 0.9206 euros)

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