France’s newly appointed Finance Minister, Eric Lombard, has outlined his vision for the country’s delayed 2025 budget, targeting a deficit “slightly above 5%” to safeguard economic growth. The announcement, made in an interview with La Tribune Dimanche, highlights a strategic shift from the previous government’s more stringent fiscal approach.
Deficit Reduction with Growth in Mind
Lombard’s target, though higher than the 5% set by the previous administration, reflects a decrease from this year’s projected deficit, which exceeds 6% of GDP. “We need to establish a good budget with a deficit slightly above 5% to protect growth,” Lombard stated. He emphasised that the deficit reduction should primarily stem from curbing public spending rather than increasing taxes. Any tax hikes, he assured, would remain minimal.
Navigating Political Hurdles
Lombard faces the challenge of passing the budget in a divided parliament after the former government lost a no-confidence vote in December. He has pledged to consult all political parties to create a comprehensive budget proposal that balances fiscal responsibility with economic growth.
Government’s Roadmap
Prime Minister Francois Bayrou, who lacks a working majority, aims to present a finalised budget by mid-February. Lombard, previously head of Caisse des Dépôts, takes on the critical task of navigating the political landscape to implement policies that foster stability while addressing public spending concerns.
As France looks to balance fiscal discipline with economic resilience, the new government’s approach will be closely watched by policymakers and citizens alike.
