According to the latest data from statistics authority Insee, the French public-sector debt has reached a record-breaking three trillion euros ($3.25 trillion) for the first time ever. The figures cover the first quarter of 2023.
By the end of March, the debt level had soared to 112.5 percent of annual GDP, amounting to a staggering 3.01 trillion euros. This surge in borrowing was primarily aimed at mitigating the effects of the coronavirus and addressing the challenges posed by the cost of living. However, it significantly exceeded the European Union’s desired target of 60 percent.
Finance Minister Bruno Le Maire has pledged to rein in public spending in response to the increasing debt burden and a credit downgrade from Fitch ratings agency. This commitment has prevented Paris from facing a similar action by Standard and Poor’s this month.
During a recent seminar on government spending, Le Maire revealed that significant savings of at least 10 billion euros have been identified in various sectors such as the health system and specific fuel tax exemptions.
The government of Emmanuel Macron has set a goal to decrease public debt to slightly above 108 percent of GDP by the conclusion of the president’s second term in 2027. Additionally, they aim to lower annual deficits below the EU target of 3.0 percent.
Ministers aim to cease assistance for energy bills implemented in response to Russia’s invasion of Ukraine. Additionally, they anticipate reaping the advantages of Macron’s highly debated pension system reform, which has raised the minimum retirement age to 64.
However, it is essential for the government to allocate funds for expensive items such as the energy transition and enhancing French defense capabilities.