European Commission building
24 May 2018

Public finances: France leaves the excessive deficit procedure

The bill on budget review and approval of accounts for 2017 was presented to the Council of Ministers on 23 May. The same day, the European Commission recommended closure of the excessive deficit procedure (EDP) opened against France in 2009.
 
Portrait of Bruno Le Maire
 
"For the first time in 10 years, France is leaving the excessive debt procedure!"
Bruno Le Maire
Minister of Economy and Finance



For the first time in 10 years, France is in compliance with its European commitments. The European Commission has taken note of the significant improvement in French public finances, with a public deficit well below 3% of the GDP in 2017 (-2.6%).

This is the result of determined action taken by the Government immediately after it first took office and throughout the second half of 2017, in a context of renewed confidence and economic recovery over the last few months of the year.

Among other things, it had to deal with the consequences of earlier decisions, including increased expenditure provided for by the Initial Finance Act for 2017, cases of under-budgeting revealed by the audit carried out by France’s supreme body for auditing the use of public funds, the Cour des comptes, in summer 2017, and a 3% tax on dividends invalidated by the Constitutional Council.

Exceptional remedial action was taken in order to set matters right (€5 billion in savings, and introduction of an exceptional tax on the largest companies to replace the tax on dividends). Without such decisions, France would once again have been unable to meet its European commitments.

Efforts to remedy public finances will continue throughout the President’s five-year term of office, with clear objectives in view: lowering compulsory contributions (-1 GDP point), decreasing public expenditure (-3 GDP points) and diminishing public debt (-5 GDP points).

 

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