France's Armand on Budget, Le Pen and Deficit Targets

France's economy is strong with stable inflation and low unemployment, but the government faces a potential motion of no confidence due to budget negotiations. The government is committed to reducing the deficit and achieving its targets, but is facing pressure to make concessions to secure political stability and avoid a potential budget crisis, potentially affecting the country's deficit targets.

France's Economic Outlook

• 00:00:29 France's economy is projected to grow at 1.1% in 2024, exceeding the Eurozone average, with inflation below 2% and unemployment at a 40-year low. These strong fundamentals support the government's commitment to deficit reduction and provide confidence in France's economic stability.

Budget Negotiations

• 00:01:04 The French government faces potential collapse due to a possible motion of no confidence. It has already made concessions on energy prices and is engaged in negotiations with political parties, primarily the National Rally, to secure a budget deal. The government is committed to a deficit reduction target of 5% by 2025.

Concessions to National Rally

• 00:01:26 The government is being pressured to make concessions to secure political stability and potentially avoid the collapse of the government. This includes demands for indexing pensions on inflation and maintaining drug reimbursements. However, the government is cautious not to appear as conceding to political blackmail.

Deficit Targets

• 00:05:00 The government is committed to achieving its 5% deficit target by 2025, a key element of France's economic policy and its contribution to European stability. While facing pressure to potentially increase the deficit due to concessions, the government insists on maintaining its commitment to deficit reduction.

Structural Reforms

• 00:10:16 The government acknowledges the challenges of passing structural reforms given the lack of a majority. However, France's economic attractiveness and track record of successful structural reforms in the past indicate a continued commitment to reform in areas such as labor duration and innovation to maintain a leadership role in Europe.