The French government claims it can slash borrowing more quickly, getting the deficit down to 2.7pc of GDP by 2027.
But the High Council of Public Finances – the country’s grandly named equivalent of Britain’s Office for Budget Responsibility – is sceptical.
Even after the government cut its predictions for economic growth, the body said “the potential GDP trajectory adopted is overestimated”.
That bodes ill for Macron’s hopes of getting borrowing under control.
“The return of the deficit below 3pc of GDP in 2027 would require a massive structural adjustment between 2023 and 2027 which, according to the government, would essentially be based on an effort to save money on spending,” the officials said.
“Ultimately, the High Council considers that the forecast presented by the government lacks credibility and consistency.”
The 3pc threshold highlighted by the High Council is important. Eurozone rules demand that countries run deficits below this level, and the European Commission can put nations into its excessive deficit procedure if they fail persistently.
This is effectively a nannying exercise, watching over the government’s shoulder to force it back on to the straight and narrow.
Those rules were suspended in 2020 and, after much negotiation, are coming back into force. France looks set to be a test case for the new regime and Brussels’ willingness to enforce the rules.
Failing to meet such a basic requirement on a seemingly permanent basis undermines France’s status as a core authority within the eurozone, as well as posing a threat to the country’s wider financial position.
It is also a personal humiliation for Macron and his dreams to revitalise the French economy and state.
Economists place the blame on the combination of weak growth and the traditional French dependence on high government spending.
Erik-Jan van Harn, at Rabobank, says Macron made a promising start, but seven years after he entered the Elysée, France’s political norms appear to be reasserting themselves.
“It is kind of a cultural thing. People expect a lot from the government,” he says.
“Macron tried to get the public finances back on track again when he started in 2017. Initially, he actually did pretty well. He also had a lot of luck, because the French economy did pretty well.
“But then Covid hit, then the energy crisis and right now it is really the question [of] whether he can make the hard decisions.”
Prior attempts to improve public finances such as controversially scrapping a tax on wealth and instead taxing property and setting a flat rate of 30pc on capital gains appear to have failed to boost income by much.
The uncomfortably large deficit also reflects a cultural view on debt, says Kenningham.
“France’s political centre of gravity is different from that of Germany, for example,” he adds. “There, politicians compete to offer the most austere fiscal policy. They promise to keep to the balanced budget rule, their debt break, and that has a lot of popular support. In France, that’s absolutely not the case. You wouldn’t win elections by promising austerity.”
Bringing down the deficit is even more challenging because of the looming threat of war. While France has ramped up spending to boost its military capacities significantly, European leaders already acknowledge that more needs to be done.
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