Excessive EU Deficit: France Struggles to Stabilize Its Economy

The European Union (EU) is experiencing a period of economic stagnation and loss of competitiveness, exacerbated by a growing debt. According to a recent report, the Twenty-Seven must deal with over-indebted countries while seeking to revive their economy and competitiveness through massive investments.

France facing debt: target 2029 for economic stability

Seven EU countries are currently in an excessive deficit procedure, having exceeded the 3% of GDP threshold set by the stability pact. France, for instance, is nearing 6%, which has led the government to promise a return to normal by 2029. This situation highlights the challenges the EU faces in maintaining budgetary stability while boosting the growth of its economy.

Mario Draghi, former president of the European Central Bank, recently published an alarming report on the competitiveness of the EU. He estimates that the Twenty-Seven should invest around 800 billion euros more each year, representing 5% of European GDP, to avoid falling behind in the global race for innovation. However, the EU’s current budget is limited to 1% of GDP, which raises the question of finding new financial resources to support this economy.

New measures to boost the European Union

A report by former Italian Prime Minister Enrico Letta proposes a series of measures to improve the economy and the functioning of the internal market. Notably, with better integration of the telecom, energy, and finance sectors. These initiatives aim to close the growth, productivity, and innovation gaps between the EU and its main global competitors.

Finally, the EU, and particularly France, must find a delicate balance between managing debt and stimulating economic growth. Massive investments and structural reforms will be essential to avoid an economic decline and maintain Europe’s competitiveness on the global stage.