France Unveils €54 Billion Deficit Cut Plan

France has unveiled its 2027 budget with a plan to cut the deficit, including measures such as freezing public sector wages and introducing new taxes. The goal is to reduce the deficit by €54 billion, with €43 billion in 'recovery measures' expected to contribute to this effort.

The budget includes freezing wages in the public sector and all but the lowest pensions, as well as new taxes on income revenues and VAT. Revenue from VAT is expected to increase by more than €7 billion compared to this year, while income tax receipts are expected to rise by €5.7 billion. However, corporate tax revenue is expected to fall by €1.8 billion.

The total effort in 2027 is expected to be €54 billion, with net tax revenue in the state budget expected to increase by €18 billion compared to this year to reach €375 billion. The government hopes that these measures will help to reduce the country's deficit and appease bond investors ahead of next year's presidential election.

## Why it matters The budget faces a tough ride in a deeply divided parliament, where it will be voted on between April 18 and May 2. The vote comes ahead of a crucial presidential election, with far-right leader Marine Le Pen currently leading in the polls. The outcome of the budget vote and the presidential election will have significant implications for France's economic and political future.

The budget is part of a broader effort by the French government to reduce its deficit and restore fiscal stability. The government's plan to cut the deficit by €54 billion is ambitious, and its success will depend on the ability of the government to implement the planned measures and achieve the expected revenue increases. The outcome will be closely watched by investors and economists, and will have significant implications for France's economy and its position in the European Union.