The European Union’s Commission has approved France’s multi-year spending plan, but it still requires ratification from the EU’s 27 member states during a finance ministers’ meeting scheduled for January next year.
Once ratified, France will have an extended timeframe of seven years to align its public spending with key EU fiscal parameters. This extension is part of the EU’s updated fiscal framework, which provides member states with an additional three years to meet their targets if they implement a series of reforms pre-approved by the Commission.
However, countries that fail to deliver on the agreed reforms face the risk of having the extended period reduced, as Brussels retains the authority to impose sanctions.
For France, the Commission has endorsed a review of its tax expenditures, including exemptions and deductions from the standard tax code that reduce government revenues. To benefit from the extended timeframe, France must also follow through on commitments to scale back a reduction in social contributions for workers earning near the minimum wage.
A French Treasury official welcomed the Commission’s assessment, calling it “good news and a sign that the government’s budget plan is on the right track.” Speaking anonymously, the official also warned that the Commission might revise its evaluation if France removes the controversial pension reforms from the plan, as demanded by both far-right and far-left political factions.
(Giorgio Leali contributed to this report)
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