Council Decision (EU) 2024/2122 on the existence of an excessive deficit in France

Summary:

Decision (EU) 2024/2122 - adopted by the Council of the European Union on 26 July 2024 - on the existence of an excessive deficit in France.

Further information:

Article 126(1) TFEU provides that Member States are to avoid excessive government deficits. The Stability and Growth Pact (SGP) is based on the objective of sound and sustainable government finances as a means of strengthening the conditions for price stability and growth underpinned by financial stability. The Excessive Deficit Procedure is framed by Article 126 TFEU and clarified by Council Regulation (EC) No 1467/97, which is part of the SGP. Council Regulation (EC) No 479/2009 lays down detailed rules and definitions for the application of those provisions. Council Regulation (EU) 2024/1264 amended Council Regulation (EC) No 1467/97, hereby introducing a reformed framework for economic governance.

This Decision establishes that an excessive deficit exists in France due to non-compliance with the deficit criterion. It concerns only the excess of the French ratio of the government deficit to GDP, with respect to the TFEU reference value of 3% GDP. The European Commission proposed it to the Council of the European Union on 8 July 2024, based on its report from 19 June. According to data validated by Eurostat, the general government deficit in France reached 5,5% GDP in 2023, and general government debt stood at 110,6% GDP. The Commission deemed the excessive deficit not to be exceptional nor temporary.

The text was adopted by the Council of the European Union on 26 July 2024 and published in the Official Journal on 1 August 2024.

Official

EUR-LEX: COM(2024)511: Proposal for a Council Decision on the existence of an excessive deficit in France https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2024:511:FIN

General Secretariat of the Council (EU): Policies: Excessive deficit procedure https://www.consilium.europa.eu/en/policies/excessive-deficit-procedure/

European Commission: DG Economic & Financial Affairs: The corrective arm / Excessive Deficit Procedure https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-pact/corrective-arm-excessive-deficit-procedure_en

Council of the European Union: Press Release, 26/07/2024: Stability and growth pact: Council launches excessive deficit procedures against seven member states https://www.consilium.europa.eu/en/press/press-releases/2024/07/26/stability-and-growth-pact-council-launches-excessive-deficit-procedures-against-seven-member-states/

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News

EurActiv, 19/06/2024: French markets wobble as EU Commission launches deficit procedure https://www.euractiv.com/section/economy-jobs/news/french-markets-wobble-as-eu-commission-launches-deficit-procedure/

Le Monde, 19/04/2024: European Commission reprimands France and six countries for breaking budget rules https://www.lemonde.fr/en/economy/article/2024/06/19/european-commission-reprimands-france-and-six-countries-for-breaking-budget-rules_6675175_19.html

The Guardian, 19/06/2024: European Commission warns France over fiscal rules as election looms https://www.theguardian.com/world/article/2024/jun/19/european-commission-warns-france-over-fiscal-rules-as-election-looms

Bloomberg, 19/06/2024: EU to Slam France on Budget Deficit, Adding to Macron’s Woes https://www.bloomberg.com/news/articles/2024-06-19/eu-to-slam-france-over-budget-deficit-adding-to-political-woes

Politico, 19/06/2024: France and Italy denounced by European Commission for overspending https://www.politico.eu/article/france-and-italy-denounced-by-european-commission-for-overspending/

Reuters, 19/06/2024: France and six other countries face EU budget discipline measures https://www.reuters.com/world/europe/eu-executive-proposes-disciplinary-budget-steps-france-others-2024-06-19/

Euronews, 19/06/2024: Commission warns France, Italy and six other countries over budget deficit https://www.euronews.com/my-europe/2024/06/19/brussels-set-to-take-aim-at-big-spenders-as-post-pandemic-deficit-rules-kick-in

Associated Press (AP News), 19/06/2024: EU criticizes France for excessive debt, putting pressure on Macron during election campaign https://apnews.com/article/eu-europe-france-debt-elections-italy-18d35a7887afa94560d817ee28ff9f23

Deutsche Welle, 19/06/2024: EU rebukes France, Italy and others over excessive debt https://p.dw.com/p/4hE5q

EUObserver, 19/06/2024: France and Italy face EU debt showdown as deficits exceed limits https://euobserver.com/green-economy/ar11845cb6

Le Monde, 21/06/2024: French minister vows to cut public deficit to within EU rules by 2027 https://www.lemonde.fr/en/france/article/2024/06/21/french-minister-vows-to-cut-public-deficit-to-within-eu-rules-by-2027_6675369_7.html

RFI News, 11/07/2024: France needs to introduce 25 billion euros in cuts to tackle EU deficit https://www.rfi.fr/en/france/20240711-france-needs-to-introduce-25-billion-euros-in-cuts-to-tackle-eu-deficit

France24, 26/07/2024: EU reprimands France and six other EU countries for breaking budget rules https://www.france24.com/en/europe/20240726-eu-reprimands-france-and-six-other-eu-countries-for-breaking-budget-rules

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Commentary and Analysis

Politico, 16/06/2024: Expect EU to finally fine a far-right France https://www.politico.eu/article/european-union-france-budget-fines-far-right/

The Economist, 18/06/2024: Bardella’s potential burden. How bad could things get in France? https://www.economist.com/finance-and-economics/2024/06/18/how-bad-could-things-get-in-france

ING Think: Article, 19/06/2024: The eurozone returns to fiscal prudency https://think.ing.com/articles/returning-to-fiscal-prudency/

Politico, 19/06/2024: France’s next government will have to tussle with EU’s spending police https://www.politico.eu/article/france-next-government-will-have-tussle-with-eu-spending-police-marine-le-pen/

RFI News, 19/06/2024: France targeted in EU crackdown on excessive spending https://www.rfi.fr/en/france/20240619-france-targeted-in-eu-crackdown-on-excessive-spending

European Trade Union Confederation (ETUC): Press Release, 19/06/2024: Deficit procedure decision a recipe for disaster https://www.etuc.org/en/pressrelease/deficit-procedure-decision-recipe-disaster

ING Think: Article, 20/06/2024: Why France could be headed for a difficult return to reality https://think.ing.com/articles/france-a-difficult-return-to-reality/

The Spectator (UK): Coffee House, 02/08/2024: Macron’s lavish spending is jeopardising French finances https://www.spectator.co.uk/article/macrons-lavish-spending-is-jeopardising-french-finances/

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