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EUROPEAN FISCAL: EC Approves French Draft Budget As Expected, NL In Breach

EUROPEAN FISCAL
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From our Policy team on the EC's review of the EU member states' 2025 draft budgetary plans:

  • The euro area's 2025 fiscal stance will be slightly contractionary by just 0.25% of GDP compared with 0.5% this year.
  • France will see the most marked fiscal contraction of 1.25% of GDP next year and the Commission said that cuts in current spending in France, Slovakia, Finland and Estonia will all be more than 1% of GDP.
  • The EC said that cuts in current spending will account for a euro area fiscal contraction of 0.4% of GDP, although national and NGEU-financed investments will provide a partial offset to the expenditure reductions.  
  • The 2025 budget plan for Germany is not fully in line with its recommended spending ceilings and The Netherlands is deemed to be not in line due to spending above its recommended medium-term ceilings in 2025.  
  • The Commission also recommends that Austria join the Excessive Deficit Procedure, although it stands ready to review that as and when a new government is formed and sets out measures to corrects its budget deficit.  

The EC said that France's plan was in line with the the bloc's recommendations. This had been reported as likely by newswires last week. 

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From our Policy team on the EC's review of the EU member states' 2025 draft budgetary plans:

  • The euro area's 2025 fiscal stance will be slightly contractionary by just 0.25% of GDP compared with 0.5% this year.
  • France will see the most marked fiscal contraction of 1.25% of GDP next year and the Commission said that cuts in current spending in France, Slovakia, Finland and Estonia will all be more than 1% of GDP.
  • The EC said that cuts in current spending will account for a euro area fiscal contraction of 0.4% of GDP, although national and NGEU-financed investments will provide a partial offset to the expenditure reductions.  
  • The 2025 budget plan for Germany is not fully in line with its recommended spending ceilings and The Netherlands is deemed to be not in line due to spending above its recommended medium-term ceilings in 2025.  
  • The Commission also recommends that Austria join the Excessive Deficit Procedure, although it stands ready to review that as and when a new government is formed and sets out measures to corrects its budget deficit.  

The EC said that France's plan was in line with the the bloc's recommendations. This had been reported as likely by newswires last week.