The governor of the French Central Bank put pressure on the country’s political class on Tuesday, deeply divided, to face strained public finances.
The collapse of Prime Minister Michel Barnier’s government last week left France’s 2025 budget in limbo. and ministers rushed to prepare interim legislation to extend the 2024 spending caps until a new budget bill can be drawn up next year.
Opposition deputies, both from the left and the extreme right, united last week in a motion of censure against Barnier’s Government, after he tried to bypass Parliament to approve part of his budget for 2025.
“Regardless of the political situation, France needs to put its public finances in order. This is in our national interest, which transcends partisan interests,” Bank of France Governor François Villeroy de Galhau said in a speech.
The fall of the Barnier Government has called into question France’s deficit reduction plans. His failed budget planned to reduce the fiscal deficit to 5% of economic output next year, compared to the 6.1% estimated for this year.
Villeroy made a broad diagnosis of the ills of French finances and urged the political class to look at how other countries are coping. with less expense and learning to maintain objectives over time.
France, which is not meeting its deficit reduction targets, has one of the highest levels of public spending in the world relative to the size of its economy and yet surveys regularly reveal growing frustration with public services.
