The target allows for more flexibility than the goal set by the previous government, said Éric Lombard.
France’s new government is aiming to lower the national deficit to between 5% and 5.5% of GDP due to its 2025 budget.
“We need to change our current trajectory”, finance minister Éric Lombard told France Inter radio on Monday.
The comments come as France’s deficit for 2024 is expected to hit 6.1% – and after budgetary disputes led to the fall of the previous Barnier government before Christmas.
Lombard nonetheless emphasised the importance of protecting growth, suggesting that lowering the deficit more than 5% would be overly stringent.
“I’m thinking about our companies. It’s our companies which create wealth, which create jobs”, he said.
In that sense, the new target aimed for “a little more flexibility” than that offered by the previous administration, Lombard added.
The budget is aiming to generate €50bn through tax increases and spending cuts, less than Barnier’s €60m target.
The exact fiscal measures contained in the budget are, however, still being finalised.
Lombard is meeting with political leaders this week to hear their thoughts on proposed fiscal plans.
He claimed that representatives from all parties had responded to his invitation to discuss the measures, apart from La France Insoumise (LFI).
The far-left group, led by Jean-Luc Mélenchon, has refused to attend a consultation before a policy speech is delivered by the current government – and before the National Assembly votes on the budget.
LFI’s Éric Coquerel will nonetheless meet Lombard on Thursday in his capacity as chair of the finance committee in the National Assembly.
A week of consultations
Lombard, along with new prime minister François Bayrou, is seeking to win over political actors who refused to accept the budget presented by the previous government.
Even so, the finance minister told France Inter that he wouldn’t categorise the consultations as negotiations – stressing that he was ready to contest demands made by political opponents.
“If we negotiate with everyone then we will once again end up in a situation where there aren’t any possible solutions. We will listen, we will take points on board, we’ll draw up a plan, and we’ll present this to the parties. Then they will decide”, he said.
The no-confidence vote that toppled the previous government, arriving after a series of political crises, plunged the country into deeper uncertainty ahead of the new year.
In mid-December, France’s senate adopted an emergency bill to ensure that a minimum level of services could be maintained during an interim period.
The Bank of France nonetheless warned that relying on this temporary legislation for too long would vastly increase the 2025 deficit.
Bank of France Governor Francois Villeroy de Galhau told France 5 that the government should aim for a deficit target close to 5% in 2025.
Looking at tax and pensions
The country has already faced disciplinary measures at an EU level for overspending, overshooting the bloc’s deficit limit of 3% of GDP.
On Monday, Lombard said that his government was committed to hitting this 3% target in 2029.
The finance minister added that he was hopeful of finding common ground with the socialist party, as well as the communist and green parties, on the subject of “fiscal justice”.
Extra government revenue could be sourced by ensuring that wealthy individuals pay their fair share of tax, he told France Inter.
When asked about modifying France’s controversial pension reform, which raised the retirement age to 64, Lombard said that nothing was off the table.
