France will need until 2029 to comply with EU spending rules, Barnier says

PARIS — The new French government will need two years more than expected to bring its deficit in line with European Union rules, French Prime Minister Michel Barnier said on Tuesday in his first major policy address.

France is planning to bring its public deficit below 3 percent of the country’s gross domestic product by 2029 instead of 2027, as initially planned. Barnier also pledged to bring the deficit for 2025 below 5 percent of gross domestic product.

Addressing France’s “colossal” debt was the first major point Barnier discussed in his speech. He likened France’s finances to “the real sword of Damocles over the head of France and the French people,” a clear reference to the fact that his government’s survival is dependent on the tacit support of the far-right National Rally.

While Barnier insisted that spending cuts should be the main tool to reduce France’s debt, he confirmed that his government is planning on hiking taxes on the country’s biggest and most profitable corporations and asking for a “special contribution” from the country’s wealthiest individuals.

But even those measures may prove controversial.

Speaking after Barnier, former Prime Minister Gabriel Attal, who now represents French President Emmanuel Macron’s centrists in the National Assembly, slammed the idea of taxing big companies to lower the deficit. Attal intimated that those taxes could push French businesses overseas.

“Even by targeting only very large companies, you can put in danger millions of jobs and thousands of subcontractors,” Attal said.

France is facing a so-called excessive deficit procedure in Brussels for overspending last year. The deficit this year could come in above 6 percent of gross domestic product, far above the 3 percent required by EU rules.

The government will have until Oct. 9 to submit to the parliament a budget for next year and until Oct. 31 to send Brussels a credible deficit trajectory for the coming years.