Steady Rise in Public Debt Remains France’s Main Economic Challenge
We have highlighted that France’s stretched public finances and high political polarisation already limit the sovereign’s room for policy manoeuvre, which are precisely the risks either parliamentary outcome will likely reinforce.
Expansionary fiscal policy platforms across much of the political spectrum of France thus restrict the prospects of material public-debt reductions in coming years, limiting the country’s ability to withstand future shocks. Whatever the outcome of the second round in the elections, the fiscal trajectory outlined in the 2024 stability programme, with a budget deficit returning below 3% of GDP by 2027, is out of date.
Any new government will have limited fiscal space…
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