France to cut spending by extra €10B as growth forecast drops

PARIS — The French government said it would reduce spending in 2024 by an extra €10 billion as the French economy is growing slower than expected.

"We earn less, we spend less, it's a rule of common sense," French Economy and Finance Minister Bruno Le Maire told reporters Monday, citing increased interest rates and geopolitical tensions including the wars in Ukraine and Gaza as reasons for the economic slowdown.

Last year, Paris outlined its spending plans for 2024 assuming that the economy would grow by 1.4 percent — an estimate France's High Council of Public Finances, an independent watchdog, then deemed overoptimistic.

France has now revised its growth forecast downward to 1 percent, meaning it will reap less than expected in taxes. As a consequence, it has to increase spending cuts for this year by an extra €10 billion to keep its goals to reduce the deficit to 4.4 percent of the GDP.

Some €5 billion will be cut from operating expenses in all ministries, for example by delaying some civil service hires, Budget Minister Thomas Cazenave told reporters on Monday.

The rest will be sliced from other public policies such as development aid (a cut of €800 million) and green subsidies for building renovation (down €1 billion). France could also reduce its contribution to the United Nations, according to Le Maire.