France Faces Tough Choices Amid Tariff Troubles

French Finance Minister Eric Lombard signals a possible leniency on France's deficit reduction target due to potential growth shortfalls spurred by new US tariffs. Deficit aims might waver as Paris navigates economic uncertainties and EU growth pressures.

In a significant statement on Friday, French Finance Minister Eric Lombard indicated that the country might ease its deficit reduction target this year. He ruled out additional spending cuts and tax hikes, focusing instead on approaching economic uncertainties carefully.

Lombard addressed concerns on BFM TV about recently announced US tariffs on the European Union, including a specific 20% tariff on EU imports that carry further implications for certain French regions.

Economists have noted that if the tariffs remain, French GDP could decline, negatively impacting deficit levels. France was aiming to reduce its deficit to 5.4% of GDP this year, a step toward the EU ceiling of 3% by 2029. Despite economic pressures, France struggles to align its fiscal path with other major European economies.

(With inputs from agencies.)