Decision 2024/2122 - Existence of an excessive deficit in France - Main contents

Official Journal

of the European Union

EN

L series

2024/2122

1.8.2024

Article 126(1) of the Treaty on the Functioning of the European Union (TFEU) provides that Member States are to avoid excessive government deficits.

The Stability and Growth Pact (SGP) is based on the objective of sound and sustainable government finances as a means of strengthening the conditions for price stability and for strong, sustainable and inclusive growth underpinned by financial stability, thereby supporting the achievement of the Union’s objectives for sustainable growth and employment.

The excessive deficit procedure under Article 126 TFEU, as clarified by Council Regulation (EC) No 1467/97 (1), which is part of the SGP, provides for a decision on the existence of an excessive deficit. Protocol No 12 on the excessive deficit procedure, annexed to the Treaty on European Union and the TFEU, sets out further provisions relating to the implementation of the excessive deficit procedure. Council Regulation (EC) No 479/2009 (2) lays down detailed rules and definitions for the application of those provisions. The Union’s reformed economic governance framework, which came into force on 30 April 2024, includes Council Regulation (EU) 2024/1264 (3), which amended Regulation (EC) No 1467/97. As the Council has not yet set the net expenditure path for France, the Commission is not able to assess compliance with the debt criterion in accordance with the new rules. This Decision therefore concerns only the excess of the ratio of the government deficit to gross domestic product (GDP) with respect to the TFEU reference value of 3 % of GDP, in line with existing legal provisions.

Article 126(5) TFEU provides that, if the Commission considers that an excessive deficit in a Member State exists or may occur, it is to address an opinion to the Member State concerned and inform the Council accordingly. Having taken into account its report of 19 June 2024 adopted pursuant to Article 126(3) TFEU, and having regard to the opinion of the Economic and Financial Committee adopted pursuant to Article 126(4) TFEU, the Commission concluded that an excessive deficit exists in France. On 8 July 2024, the Commission therefore addressed such an opinion to France and informed the Council accordingly.

Article 126(6) TFEU provides that the Council is to consider any observations which the Member State concerned may wish to make before deciding after an overall assessment whether an excessive deficit exists. In the case of France, the overall assessment leads to the conclusions set out below.

According to the data validated by the Commission (Eurostat) on 22 April 2024, the general government deficit in France reached 5,5 % of GDP in 2023, and general government debt stood at 110,6 % of GDP. The Commission, in its report under Article 126(3) TFEU, considered that the excess of the deficit over the TFEU reference value of 3 % of GDP in 2023 is not exceptional, as it results neither from an unusual event nor from a severe economic downturn in the sense of the SGP. The excess over the TFEU reference value is also not temporary, based on the Commission’s 2024 spring forecast, which projected the general government deficit to remain above 3 % of GDP in 2024 and 2025. In sum, the deficit in 2023 was above and not close to the TFEU reference value of 3 % of GDP. The excess is neither considered to be...