(Bloomberg) — The French government plans to crack down on absenteeism in the civil service and reduce development aid as part of a series of measures aimed at delivering €5 billion ($5.4 billion) of spending cuts in next year’s budget.
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Around half the savings would come from canceling a significant part of the reserves set aside for ministries to cope with unforeseen events, according to officials from the budget and civil service ministries who declined to be named in line with internal rules.
Prime Minister Michel Barnier has proposed €60.6 billion of spending cuts and tax hikes in the budget bill for 2025 in an effort to bring the country’s ballooning deficit under control and shore up investor confidence in the European Union’s second-biggest economy.
The government on Sunday detailed for the first time the portion of the savings, which it has said would be introduced by amendment during parliamentary debate.
The officials said a plan to combat absenteeism, which jumped 80% between 2014 and 2022 to 77 million days a year at a cost of €15 billion, would bring about €1.2 billion of savings.
Barnier’s administration also proposed a €640 million reduction in public development aid, as well as taking €300 million from state contractors operating with a surplus.
Around €2.6 billion of savings would come from canceling part of the precautionary reserves. This would be shared across all ministries — apart from defense, the interior, justice, higher education and research, and overseas territories — and they would have to prioritize spending, reduce operating costs and spread out investments, the officials said.
France is under increasing pressure to get its fiscal house in order after it received the third warning in the space of two weeks on Friday over the deterioration of its public finances. Moody’s Ratings placed the country’s credit rating on a negative outlook. That came after Fitch put a negative outlook on its creditworthiness assessment and Scope Ratings downgraded it.
Barnier’s budget bill is aimed at narrowing the deficit to 5% of economic output from the 6.1% to 6.2% this year in a first step toward getting the gap within the EU’s 3% limit by 2029 — something the previous administration had pledged to do by 2027.
His task is made harder as his minority government can easily be toppled by a no-confidence vote in the National Assembly. President Emmanuel Macron’s decision to call snap elections over the summer delivered a deeply divided lower house with no group able to form an absolute majority to push through legislation.