Emmanuel Macron is facing a potential economic crisis in France after his finance minister warned the country’s public deficit is “one of the worst in its history”.
“Apart from one or two years of exceptional crisis in the last 50 years, we have one of the worst deficits in our history”, Antoine Armand said on French radio. “So, in that respect, the situation is serious”, he added.
France’s debt was an eye-watering 111 percent of GDP at the end of March 2024, while its budget deficit is expected to rise to jump to around 5.6 percent this year.
France already has the highest tax burden in Europe, and yet is now facing the prospect of further tax increases or cuts to public spending.
The new government, led by Michel Barnier, a member of the French centre-right Republican party, has already been criticised for failing to represent the wishes of the electorate.
June and July’s national assembly elections saw a left-wing coalition called the New Popular Front triumph, beating Macron’s alliance and the far-right National Rally.
The imposition of conservative-style fiscal policies will further stoke the fire of those in France who believe the new government is not what the French people voted for.
That said, those on France’s left may be quietly pleased to learn that the new Barnier government has indicated that large companies and the country’s wealthiest may be covering the cost of any future tax increases.
On Sunday, Prime Minister Mr Barnier discussed “targeted levies on wealthy individuals or certain large companies” to help mitigate the pressure on the public finances.
This message was reiterated by Mr Armand, who pressed home that the government was not planning to slap any new or increased taxes on the middle classes.
He said: “The Prime Minister has said very clearly that we are not going to raise taxes on those who work, who belong to the middle class in the broadest sense.
“The action we have been taking for several years… is that work pays. And so those who have only their income to live on, who have only their salary to live on and who have difficulty finding somewhere to live or food to eat, must not be (…) penalised.
“People who have very substantial assets, and who sometimes don’t pay much tax… we’ll be looking at this over the next few weeks… can they contribute more in the current situation?”
