Breaking News: France's Caretaker Government Sets 2025 State Spending at Current Levels, Saving 10 Billion Euros
In a bold move, France's caretaker government has announced plans to keep state spending at current levels for 2025, saving an estimated 10 billion euros. This decision comes as President Emmanuel Macron has yet to name a new government after a recent hung parliament election.
Outgoing Prime Minister Gabriel Attal has set spending limits for each ministry, keeping overall state spending at 492 billion euros, unchanged from this year. This move will tighten the budget by about 10 billion euros, with an additional 20 billion euros in emergency spending cuts also rolled over to 2025.
The government's goal is to reduce the overall public sector budget deficit to less than 3% of output by 2027. While the current aim is to cut the deficit from 5.1% of GDP this year to 4.1% in 2025, the final target will depend on the upcoming social spending budget.
Notable changes include an increase in military spending next year and a reduction in employment support spending due to low unemployment rates. Macron is set to meet with party leaders to appoint a new prime minister who will navigate the challenges of passing a budget in a divided parliament.
This decision could have significant implications for France's economy and financial markets. Investors should stay informed about these developments as they unfold to make informed decisions about their portfolios.