France Seeks EU Deadline Extension Amid Budget Crisis

France has asked the European Commission to extend its deadline for a public deficit reduction plan to align with its 2025 draft budget. Facing potential budget deficits, the new government led by Prime Minister Michel Barnier confronts tough decisions amidst political instability and a potential no-confidence vote.

France has formally requested the European Commission to extend the deadline beyond September 20 for submitting a plan to address its public deficit, aligning it with the 2025 draft budget, according to La Tribune du Dimanche, citing the Finance Ministry.

The finance ministry cautioned in a recent letter to lawmakers that France's budget deficit could surge unexpectedly this year and next if additional savings are not identified, as the country grapples with deepening political turmoil as the euro zone’s second-largest economy.

The deteriorating financial situation has subjected Paris to EU disciplinary actions, presenting challenges for incoming Prime Minister Michel Barnier as he strives to form a new government and draft a budget by October 1, under the looming threat of a parliamentary no-confidence vote.

The extension request aims to align the deficit reduction plan with the 2025 draft budget, the finance ministry noted. While a strict deadline is set for September 20, it could be extended to October 15 with mutual agreement.

The financial gap implies that the new government must decide between spending cuts and tax increases or risk losing credibility with the EU and financial markets.

President Emmanuel Macron appointed 73-year-old Michel Barnier, a conservative and former EU Brexit negotiator, as prime minister last week, concluding a two-month search after calls for a legislative election resulted in a hung parliament.

Barnier acknowledged the difficulty of his task, stating he could not perform miracles and aimed at restoring order to the country’s finances.

Barnier continued consultations on Sunday to form his government, navigating a potential no-confidence vote from the dominant New Popular Front (NFP) alliance and the far-right National Rally (RN), who together hold a parliamentary majority.

RN leader Marine Le Pen signaled conditional support for Barnier, emphasizing the need to address the concerns of the party's 11 million voters. She warned that any neglect of French citizens' needs would prompt her party to oppose the government.

(With inputs from agencies.)