France may face a serious budget deficit this year due to declining tax revenues and rising costs. Reuters writes about it, UNN reports.
Details
France, which is the second largest economy in the eurozone, may face a much larger budget deficit this year than planned. According to a letter from the Ministry of Finance to lawmakers, this will happen if additional ways to cut spending are not found due to a shortfall in tax revenues.
According to the newspaper, the deteriorating financial situation in the country is increasing pressure on President Emmanuel Macron, who is trying to form a new government after the early elections.
Fiscal constraints are limiting the new government's options. On Monday, the Ministry of Finance provided lawmakers with an update on the budget situation. The document shows that this year's public sector budget deficit could reach 5.6% of GDP instead of the 5.1% planned by the interim French government.
To stabilize the budget, the Ministry of Finance froze loans worth EUR 16.5 billion. Additional loan write-offs of another EUR 7 billion are expected by the end of the year.
Recall
French President Macron is holding consultations on a new head of government. The most likely candidate is Thierry Baudet, chairman of the French Economic, Social and Environmental Council.