PARIS: France now has “one of the worst” public deficits in its modern history, the newly-installed finance minister said on Tuesday, confirming new taxes on the wealthy and big businesses are on the table to get finances back in order.

Antoine Armand added that he would be talking to economic actors including unions and bosses’ organisations in a bid to slash government overspending.

The deficit is expected to reach 5.6 per cent or more of national output this year — almost double the European Union limit. “Apart from one or two one-off crisis years in the past 50 (years), we have one of the worst deficits in our history,” Armand told broadcaster France Inter.

“On that level, the situation is grave.” The new government under conservative Prime Minister Michel Barnier faces a parliamentary gauntlet in the coming months. Ministers must try to get a 2025 budget with steps to repair public finances through the National Assembly lower house, divided roughly into three after July’s inconclusive snap election.

Barnier can count on support from conservatives and President Emmanuel Macron’s much-reduced camp, but the NFP left alliance and the far-right National Rally (RN) could topple the government at any time in a confidence vote if they join forces.

In a Sunday interview, the prime minister brought “targeted” tax rises on “wealthy people or some large companies” into play as part of a plan to right the ship. Barnier is expected to present his draft budget early next month, an unprecedented delay from the usual Oct 1 deadline after Macron took all summer to name a new government chief.

Published in Dawn, September 25th, 2024