France Announces $11 Billion Budget Cut To Tackle Deficit

The French government on Thursday announced budget cuts of 10 billion euros ($11 billion) as it seeks to rein in its budget deficit after growth failed to meet expectations.
The cuts controversially include 2 billions euros that were to be spent on environmental and energy transition programs.

Other cuts are being made to previously budgeted spending on education, justice, defence and regional development.

The decree was published in France's official journal and signed by Prime Minister Gabriel Attal, who was recently named by centrist President Emmanuel Macron in a cabinet reshuffle.

The government had warned of the cuts Sunday to hold its 2024 deficit to 4.4 percent of GDP, after revising downward its growth forecast to one percent amid international tensions and slowing economies in major trading partners such as China and Germany.

The government has indicated it is concerned about French debt being downgraded by international rating agencies.

The new budget cuts come on top of 16 billion euros of reduced spending already inscribed in the 2024 budget, largely due to the phase-out of energy subsidies introduced when gas and electricity prices soared after Russia's invasion of Ukraine.

Sources in the French finance ministry have also warned that the 2023 deficit might have overshot its target of 4.9 percent of GDP.

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