French PM Delays Deficit Target, Outlines Spending Cuts and Tax Hikes

French Prime Minister Michel Barnier`s recent policy address aimed to address France`s financial concerns and reassure investors. Barnier announced a two-year delay in reaching the budget deficit target of 3%, pushing it to 2029. He proposed a combination of spending cuts and tax increases for the wealthy and large corporations. Acknowledging the seriousness of France`s substantial debt, Barnier stressed the need for action to prevent a financial crisis. While French bond yields initially saw a decrease, they rose slightly after his speech. The deficit is projected to exceed 6% this year, prompting the European Union to intervene with stricter fiscal measures. Barnier`s plan targets a deficit reduction to 5% next year, achieved through spending cuts and tax hikes. This announcement follows last week`s warning about a larger-than-expected deficit due to disappointing tax revenue and increased local spending, factors that have worried investors and led to a sell-off of French assets.