(Bloomberg) -- French Finance Minister Bruno Le Maire is pressing ahead with planned spending cuts as he seeks to reassure markets and the European Union of the country’s fiscal credibility despite the political uncertainty over the next government.
Le Maire said it is crucial to meet the objective of bringing the deficit to 5.1% economic output this year and within 3% by 2027. After already announcing spending cuts in February, he outlined another €10 billion ($10.8 billion) of savings that will come from capping the budgets of ministries, changes to a tax on profits of energy companies, and cuts at the local authority level.
He also said his administration has begun working on possibilities for spending cuts in the 2025 budget, although it will not be his responsibility to take a decision on that. The next finance minister is also free to make changes to the extra spending cuts Le Maire decided for 2024.
“Either we continue with savings and repairing public finances, or we massively increase taxes on French people,” Le Maire said. “It’s the only alternative, failing which we would expose ourselves to a very strong market reaction.”
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