The French nominal government deficit stood at 2.6% of GDP last year, the French National Institute of Statistics and Economic Studies (INSEE) reported on Monday 26 March.
If this figure is approved by the statistical office of the European Union (Eurostat) next month, the Commission may decide to bring France out of the excessive deficit procedure (EDP) in May.
The French state would then join the preventative plank of the Stability and Growth Pact, eight years after it was placed under the EDP. This would mean that over the coming years, French authorities would have to focus on reducing structural government deficit.
This figure of 2.6% of GDP is good news for Paris, which was still forecasting a nominal deficit of 2.9% of GDP for 2017 just a few months ago (see EUROPE 11885). For 2018, the draft finance bill presented to the European Commission on 14 October of last year predicted a nominal deficit of 2.6% of GDP (see EUROPE 11884).
There are currently just two countries still under the excessive government deficit procedure: France and Spain. In light of Madrid's budgetary trajectory, Spain is also expected to come out of the EDP (see EUROPE 11885).
Bruno Le Maire, the French minister for the economy and finance, welcomed the report. “This is proof that the strategy of improving the public accounts set out by the President of the Republic is the right one”, he said. “This is good news for France and for the Eurozone. These positive figures are the result of the efforts made by the people of France in recent years. A major step has been taken towards bringing France out of the excessive deficit procedure. The Commission will make its decision in May, on the basis of the 2017 figures and forecasts for 2018 and 2019”, said Pierre Moscovici, the Commissioner for Economic and Financial Affairs.
Eurostat will announce its figures for nominal deficits in the European Union on Monday 23 April. It is on this basis that the Commission will make its decision on whether to remove the countries from the EDP. (Original version in French by Lucas Tripoteau)