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France Faces Budget Crisis as Political Turmoil Disrupts Fiscal Consolidation Efforts
France's budget deficit is projected to reach 6.2% of GDP in 2024, the second-largest in the EU, as the country faces fiscal challenges amid high pension costs and tax revenue shortfalls. Following the collapse of Prime Minister Michel Barnier's government, President Macron may appoint a new PM to navigate budget negotiations, but fiscal consolidation efforts are expected to slow. Despite rising debt spreads, the ECB remains cautious, as current market conditions do not warrant intervention, though political instability could heighten risks.
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