The French government has announced plans for €25 billion in budget cuts this year to address EU concerns over its deficit and debt levels.
. Finance Minister Bruno Le Maire stated these cuts are necessary to reduce the deficit to 5.1% of GDP, revised from an earlier 4.4% target.
This announcement comes in the wake of France's recent parliamentary elections, which resulted in no single party winning an outright majority. A left-wing alliance, the New Popular Front (NFP), gained the most seats but falls short of a majority.
The European Commission has criticized France for its financial state, with debt exceeding 110% of GDP - nearly double the EU-authorized level. While the Commission can theoretically fine EU members for excessive deficits, it has never done so.
The NFP's economic plans, including reversing pension reforms and increasing the minimum wage, could further increase deficits. This prospect has affected France's creditworthiness, with investors demanding higher returns on French government bonds compared to some other European countries.
Standard & Poor's recently downgraded France's sovereign debt rating to "AA-" due to growth concerns. Despite these challenges, Le Maire has pledged to bring the deficit below 3% by 2027, in line with EU requirements that were temporarily suspended due to the COVID-19 pandemic and the Ukraine war's economic impact.
EU members have agreed to gradually realign their deficits with these requirements in the coming years.
Labour unrest
Meanwhile, France's largest union federation, CGT, has announced nationwide protests by its railway workers' branch on July 18, coinciding with the first session of the newly elected parliament
This call to action follows President Macron's open letter urging "republican forces" to form a "solid majority" for governance. The union contends that the left-wing New Popular Front coalition should lead the new government instead.
Elsewhere, unions at state-controlled ADP group, which runs Charles de Gaulle and Orly airports, announced a one-day stoppage on 17 July to press for bigger Olympics bonuses and staff recruitment.
"The fact that we are forced to call for a strike is because of the obstinate refusal of management and in particular the CEO of the company," unions said in a joint statement on Monday.
The stand-off with management could impact the Paris Games, with athletes set to start arriving from 18 July and hundreds of thousands of ticket holders flying in ahead of the 26 July opening ceremony.
