French Prime Minister Urged to Address Worsening Budget Deficit

French Prime Minister Michel Barnier faces mounting pressure to address a growing fiscal deficit. With a crucial 2025 budget deadline looming, Barnier and Finance Minister Antoine Armand are tasked with finding billions in cuts and tax hikes. The deficit exceeds initial forecasts, and France's parliamentary divisions complicate their efforts.

French Prime Minister Michel Barnier is under increasing pressure to swiftly address a mounting fiscal deficit that threatens his newly formed government. With only days left to finalize the 2025 budget, Barnier and his new Finance Minister Antoine Armand must identify billions of euros in spending cuts and tax increases to close a larger-than-expected deficit.

In a politically divided parliament, where the government lacks a majority and both left-wing and far-right lawmakers hold significant sway, this task becomes even more challenging. The previous administration aimed to reduce the fiscal shortfall to 3% of GDP by 2027. However, recent revenue shortfalls and budget overruns have made this target appear increasingly unattainable.

Bank of France Governor Francois Villeroy de Galhau suggested a five-year plan could be more realistic than the previously envisioned three years. Meanwhile, consumer confidence has marginally improved, but investors remain skeptical of the government's ability to tackle the budget crisis effectively.

(With inputs from agencies.)