No need for a European crisis in addition to a French one. On Tuesday, November 26, in the midst of a heated political debate in Paris, the European Commission decided to support the budget proposal put forward by Michel Barnier's government, as part of its examination of all 27 member states' budgets. Brussels also gave its seal of approval to France's debt reduction plan, presented as part of the new Stability Pact, renewed in the spring. This notable indulgence comes at a time when Barnier's first steps toward restoring France's public finances are considered increasingly unlikely.

The EU's executive arm considers the prime minister's medium-term plan for the next seven years to be "credible," and accepts that, in view of France's current difficulties, the target of bringing the deficit below 3% of gross domestic product (GDP) should be postponed from 2027 to 2029.

According to the document transmitted by France on October 31, the deficit of the state, local authorities and Social Security, expected at 6.1% of GDP this year, would gradually fall to 2.8% in 2029, thus ultimately complying with European rules. At the same time, French public debt would continue to rise, from 112.9% of GDP this year to 115.8% in 2029. Again, a far cry from the 60% ceiling stipulated by European treaties.

As for seven other countries, including Italy and Greece, the EU executive body considers the plans presented by France "in line with the recommendations, as their net expenditure is projected to be within the ceilings." On the other hand, the Commission has postponed its judgment concerning the Netherlands, one of the most frugal countries in Europe, which already respects the 3% deficit and 60% debt limits.

In its copy submitted to Brussels, France plans to make a budgetary effort of €60 billion, in the form of spending cuts and new taxes, and promises to reduce the deficit to 5% of GDP by 2025. "On paper, these objectives are perfect and on target," confided a European diplomat. "We'll have to see what happens in reality, because so far, not only France but also other countries, such as Italy, have never managed to meet their commitments."

The question seems all the more justified given that, in Paris as in Brussels, many people doubt the credibility of official promises and already consider the plan presented in Brussels less than a month ago to be obsolete. According to the European Commission itself, France's public deficit is likely to reach 6.2% rather than 6.1% of GDP this year. And, for 2025, nobody believes in the 5% deficit promised on paper.

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