François Villeroy de Galhau, the governor of the Bank of France, expressed concern about the deficit in 2023, which exceeded government projections. He emphasized the need to address public spending, stating that governments have not fulfilled their commitments in this area for the past fifteen years. Villeroy de Galhau reassured that the deficit does not mean the bankruptcy of France, but it does require urgent action.
Despite the deficit in 2023, the government remains committed to reducing the public deficit to below 3% of GDP by 2027, as promised to European partners. To achieve this goal, the government is planning significant budget cuts. Ten billion euros in savings have been already confirmed for 2024, with an additional 20 billion euros in cuts announced for 2025. Villeroy de Galhau stressed the importance of prioritizing and increasing efficiency in spending across all sectors, including the state, local authorities, and social benefits.
In an effort to identify additional areas for savings, parliamentarians from both the majority and opposition were invited to the Ministry of Economy. A meeting has been scheduled for April 9th at Bercy to engage with local government associations and explore potential cost-saving measures within local authorities. Villeroy de Galhau insisted that the focus should not be on austerity or general spending cuts, but rather on achieving overall stability through prioritization and efficiency.
Villeroy de Galhau emphasized the urgency of addressing public spending before considering potential tax increases or additional measures targeting company profits. He stressed the need for a fair and shared effort from all sectors of society, including the government, local authorities, and social welfare programs. The governor highlighted the importance of finding a balance in budget management and ensuring that all parties contribute to the necessary cost-saving measures.
The growing deficit in 2023 has put the government in a difficult position, but they are determined to fulfill their commitment to reduce the deficit to meet EU requirements. Villeroy de Galhau stressed that while the focus should not be on imposing austerity measures, there is a need for increased efficiency and prioritization in spending. The government has already outlined significant budget cuts and is seeking input from various stakeholders to identify further areas for savings. Through collaborative efforts, it is hoped that the government can achieve its target of reducing the deficit below 3% of GDP by 2027.
