The European Commission has initiated proceedings against ten EU countries, including France, for excessive public deficits. In 2023, France's budget deficit was 154 billion euros and is expected to reach 170 billion this year, exceeding 5% of France's GDP, far from the 3% threshold tolerated by Brussels. France, along with Italy, Romania, and Hungary, risks fines of 2.5 billion euros.
The countries with the highest deficits in 2023 are Italy (7.4% of GDP), Hungary (6.7%), Romania (6.6%), France (5.5%), and Poland (5.1%). The financial situation in France particularly worries European financial markets, especially with the upcoming French legislative elections. In Germany, it is remembered that France's last balanced budget was in 1974.
The Commission has been patient, suspending the criteria of the European Stability Pact during the Covid crisis, allowing states to spend freely to support their economies. However, this tolerance has now ended. An anonymous expert from Bercy commented that France's poor management is catching up with it. The economic programs of the legislative elections, particularly those of the « new popular front » and the National Rally, could further worsen the budget deficit by reversing reforms recommended by Brussels.
The Commission and Germany are strictly monitoring compliance with budgetary rules. However, imposing a 2.5 billion euro fine on a country already in deficit could paradoxically deepen its financial hole. This is one of the contradictions of the European procedure for excessive deficits, a consequence of the federal agreements signed by all eurozone countries.