France to Pursue Reforms to Close Budget Deficit, Attal Says

In light of S&P Global Ratings' decision to downgrade France's credit rating, Prime Minister Gabriel Attal announced that France will undertake significant reforms, including an overhaul of unemployment insurance, to control the budget deficit. President Emmanuel Macron's administration is determined to bring the deficit below 3% of GDP, continuing the reformist approach of Macron's first term.

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France is counting on further reforms, such as the overhaul of unemployment insurance, to bring the budget deficit under control, Prime Minister Gabriel Attal said following S&P Global Ratings’ decision to lower the nation’s credit rating.

We’re going to continue to reform and ‘of course’ France will meet the goal.

Prime Minister Gabriel Attal

President Emmanuel Macron brought the deficit below 3% of gross domestic product early in his first term through reforms and can do so again, Attal said Sunday in an interview on France 3 television.

“We’re going to continue to reform” and “of course” France will meet the goal, Attal said, pointing to a plan to tighten rules for unemployment insurance. “It’s a reform designed to get more French people working. The more French people that work, the more contributions are paid into government coffers,” he said.

France’s worsening fiscal situation has become an issue in the campaigning for the June 9 European parliamentary elections. The latest poll Sunday for La Tribune and BFM TV shows Marine Le Pen’s far-right National Rally remains far ahead of Macron’s Renaissance party, by 32.5% to 16%.

Asked about proposals from the Socialist Party and others on the left for taxes on the wealthy, Attal reiterated that the government wants to avoid new levies. “We know how it works with them,” he said. “They say it’s for the rich and in the end, it’s the middle classes that are affected.”

It’s a reform designed to get more French people working. The more French people that work, the more contributions are paid into government coffers.

Prime Minister Gabriel Attal

S&P said Friday that although reforms and a recovery in economic growth will improve the situation, France won’t achieve its target of bringing the deficit below 3% of GDP in 2027. Huge spending during the Covid pandemic and energy crisis, followed by a slowing economy, left France with a wider-than-forecast budget gap for 2023.

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