France Delays Budget Deficit Reduction Deadline

French Prime Minister Michel Barnier announced a revised plan to reduce the country's budget deficit, extending the timeline to achieve the EU's 3% GDP limit from 2027 to 2029. In his first major address, Barnier described France's 'colossal' debt as a significant challenge, likening it to a 'sword of Damocles' over the nation. The plan aims to lower the deficit to 5% of GDP by 2025, with two-thirds of the reductions coming from spending cuts and the remainder from tax increases on large corporations and the wealthy. EU officials have deemed the new targets more realistic but emphasize that the credibility of this plan hinges on forthcoming reforms. France is set to submit its 2025 budget draft to the European Commission by mid-October, as well as a seven-year reform and debt reduction plan for approval. The success of Barnier's approach will be scrutinized closely by EU capitals, particularly as it represents a shift from previous fiscal ambitions.