France's Fiscal Tightrope: Balancing Deficit Reduction and Economic Stability

France faces a significant economic challenge as its public deficit surpasses 6% of GDP. Newly appointed Prime Minister Michel Barnier is tasked with reducing this deficit, which has expanded due to COVID-19 relief, energy subsidies, and tax cuts.

Barnier's strategy involves cutting spending by eliminating apprenticeship subsidies and increasing taxes on the wealthy and profitable companies. The goal is to reduce the deficit to 5% by 2023 and 3% by 2029. However, this plan encounters resistance from the left-wing New Popular Front, which threatens a no-confidence vote.

Economists are divided, with some cautioning that drastic spending cuts might lead to a recession. Politically, Barnier lacks a parliamentary majority, complicating budget approval.

Despite these hurdles, there is optimism from international bodies like the IMF, which believes Barnier can successfully navigate these challenges to avoid conflict with the EU's deficit rules.