Economists at Barclays have criticised French Prime Minister Michel Barnier’s economic plans, calling the goals “unreachable.”
Barclays’ economists warned clients that Barnier’s pledge to reduce the budget deficit, currently around 6% of GDP, to 5% would likely be derailed by his need to maintain support from coalition partners. The bank argued that France has a history of missing its budgetary targets and that the proposed fiscal cuts would be politically untenable.
The economists noted: “Achieving this would require significant fiscal adjustments, which we doubt the government can implement. The necessary measures would conflict with the political agendas of the coalition’s supporting parties. Moreover, such a large fiscal consolidation would likely hamper an already weak economic outlook.”
Barclays forecasts that France’s deficit will reach 5.8% of GDP by 2025, rather than Barnier’s target. Additionally, they predict public debt will continue to rise, hitting 115.2% of GDP by 2025, up from 112% this year.
The bank also suggested that Barnier’s government may need to invoke Article 49-3 of the Constitution to pass the budget, bypassing a vote in the National Assembly. This could trigger no-confidence motions from opposition parties, potentially toppling the government and rejecting the budget.
Barclays added that the adoption of the 2025 budget may hinge on the far-right party, National Rally (RN), led by Marine Le Pen, abstaining from such no-confidence votes.
Le Pen recently reiterated that her party would not automatically support no-confidence motions to give the government a chance to enact necessary recovery measures. However, she also set clear limits, particularly opposing any tax increases on the working and middle classes.
