France Requests Extension on Deficit Reduction Deadline

PARIS (Reuters) – France has asked the European Commission to extend beyond Sept. 20 a deadline for submitting a plan to reduce its public deficit to align with Paris’ 2025 draft budget, according to La Tribune du Dimanche, citing the Finance Ministry.

The finance ministry indicated that without finding additional savings, France could face a spiraling budget deficit this year and next. This situation comes as the euro zone’s second-largest economy grapples with a political crisis and has entered EU disciplinary proceedings. Incoming Prime Minister Michel Barnier is under pressure to form a new government and prepare a budget by Oct. 1, amid the looming threat of a parliamentary no-confidence vote.

The finance ministry confirmed the request for an extension but did not specify the duration. They asserted that the extension is needed for coherence between the fiscal plan and the 2025 budget. A spokesperson from the commission noted that while the September 20 deadline is set in the rules, member states can negotiate reasonable extensions with the Commission.

If the financial shortfall continues, Barnier’s government may face difficult decisions between cutting spending and raising taxes, risking credibility with both France’s EU partners and financial markets.

President Macron appointed the 73-year-old Barnier, a conservative and former EU Brexit negotiator, after a two-month search following a hung parliament resulting from legislative elections. Barnier stated he could not perform miracles and aimed to restore order to France’s finances.

The leftist New Popular Front (NFP) alliance, currently the largest bloc in parliament, together with the far-right National Rally (RN), holds the potential to remove Barnier if they collaborate on a no-confidence vote. The RN has offered conditional support for the new government. Party leader Marine Le Pen warned that if the concerns of the 11 million voters who supported RN are neglected, they would not hesitate to oppose the government in the coming weeks.