French gov. to cut third of agencies to reduce budget deficit: FT
2 Min Read
France aims to merge or eliminate a third of state agencies by year-end to save up to €3 billion, as part of broader efforts to reduce its budget deficit.
-
French Budget Minister Amelie de Montchalin leaves the first cabinet meeting of the new government, on January 3, 2025, at the Elysee Palace in Paris. (AP Photo/Thomas Padilla)
The French government will propose merging or eliminating a third of state-backed agencies by the end of the year, in an effort to curb public spending, according to Public Accounts Minister Amelie de Montchalin.
De Montchalin, speaking to CNews/Europe 1, stated that this move could save between €2 billion and €3 billion, "We will, by the end of the year, propose in the budget that a third of state-backed agencies and operators that are not universities are merged or eliminated."
Moreover, the proposed French government agency cuts are part of a broader fiscal strategy aimed at reducing France’s public sector budget deficit.
Prime Minister Francois Bayrou’s administration targeted a reduction from 5.4% of economic output to 3%, the European Union’s ceiling, by 2029.
De Montchalin emphasized that agencies and operators would exclude universities, instead focusing on other state-backed entities, aiming to streamline operations, eliminate redundancies, and boost efficiency within the public sector.
Finance Minister Eric Lombard has further outlined the government's fiscal goals, stating that France will seek to cut €40 billion in spending during the next fiscal year. These measures align with the EU’s fiscal rules while ensuring sustainable growth.
France lowers growth outlook
Earlier this month, amid escalating global trade tensions, French Finance Minister Eric Lombard announced a downward revision to the government's 2025 growth projections on April 9.
French Finance Minister Eric Lombard stated on television channel TF1 that the euro zone's second-largest economy is now projected to grow by just 0.7% in 2025, down from the 0.9% forecast originally used for budget planning, while emphasizing the government's determination to maintain its deficit reduction targets despite the revised growth outlook.
Acknowledging the worsening economic outlook, Lombard affirmed the government's commitment to cutting the public sector deficit to 5.4% of GDP this year, down from 5.8% in the previous year, while emphasizing that achieving this target would necessitate identifying additional budget savings.
