France’s New Finance Minister Vows to Tackle Deficit and Boost Competitiveness

France’s new finance minister, Antoine Armand, has pledged to tackle the country’s ballooning deficit and comply with the European Union’s budget rules. Armand made the vow during a meeting with EU counterparts in Luxembourg, where he presented a budget plan aimed at reducing France’s colossal debt through spending cuts and new taxes.

“We have prepared a budget to strengthen the country’s financial and national sovereignty,” Armand said, stressing that respecting EU rules is a question of international credibility. The new minister will present the national budget on Thursday, which Paris hopes will help bring the deficit under control.

France has been under formal procedure since July for breaking budget rules, with its deficit above the three percent limit. The country must submit a multi-year plan to reduce its public deficit, but has obtained a delay after it took time to form a new government following snap elections. Paris now has until October 31 to submit its budget plan to the European Commission.

EU economy chief Paolo Gentiloni appeared cautiously optimistic about talks with France, describing conversations with Armand as “promising” despite the “difficulties.” However, Germany’s finance minister, Christian Lindner, warned against joking about with the credibility of public finances with the financial markets.

Armand is under pressure to persuade the markets that he will achieve his goals, and has promised to bring the deficit below the three percent mark by 2029. In the short term, he aims to reduce the deficit to five percent in 2025 from 6.1 percent this year.

The French prime minister, Michel Barnier, has described the country’s debts of over 3.2 trillion euros – more than 110 percent of GDP – as the “true sword of Damocles” hanging over the head of France and every French person.

Armand also discussed broader issues affecting Europe, including the need to boost the continent’s competitiveness. He warned that the EU is falling behind China and the United States in strategic areas, and stressed the need to work to deepen the single market and bolster European industrial policy.

The French finance minister’s comments come as the country faces a delicate balancing act between pleasing the markets and Brussels while ensuring it does not cause too much pain for citizens and businesses. Time is short, with the deadline for submitting the budget plan just around the corner.