French Parliament to Hold Serious Budget Talks Amid Rising Bond Market Tensions
Government Response to Rising Borrowing Costs and Budget Deficit
Rising Borrowing Costs and Parliamentary Action
PARIS, Aug 24 (Reuters) - Rising French government borrowing costs will require "serious" talks in parliament on the country's budget, said government spokeswoman Maud Bregeon on Monday, as the government tries to balance cutting the deficit without hurting consumers too much.
Government's Commitment to Fiscal Rigour
"All of this will clearly require a lot of rigour," said Bregeon, who also reaffirmed that the government would look to improve the public finance situation and reduce the deficit without imposing tax rises on French citizens.
Bond Yields Reach New Highs
The yields on French 10-year government bonds reached their highest level since 2008 last week, going above 4.13%.
Political and Economic Implications
Upcoming Parliamentary Budget Battle
The stage is set for a potentially rocky parliamentary budget battle, as the government seeks to keep the deficit under control ahead of a 2027 presidential election that polls suggest could favour the far right.
Finance Ministry's Deficit Target
French Finance Minister Roland Lescure had also said earlier on Monday that the government would do all it could to keep the budget deficit as close as possible to 5%.
EU Deficit Rules and Forecasts
The European Commission has forecast a 2026 French budget deficit of 5.1%, which would be in breach of EU rules stipulating that countries have a 3% ceiling for their deficit.
Reporting Credits
(Reporting by Inti Landauro and Michel Rose;Editing by Sudip Kar-Gupta)
