Barnier gets some breathing space as European Commission says ‘oui’ to French budget

BRUSSELS — The European Commission approved French Prime Minister Michel Barnier’s 2025 draft spending plan — handing some small respite to the fragile government in Paris.While the endorsement might improve Barnier’s chances of convincing Frances’s highly fragmented parliament to pass his budget plans domestically, things could still backfire if the budget fails to win the confidence of Marine Le Pen’s far-right National Rally.
The Commission also okayed a request to extend the period by which the country must make critical public-spending cutbacks.
On Monday, Le Pen threatened to vote against Barnier’s government in a vote next month that would likely trigger the collapse of the minority government, upsetting French bond markets which traded at levels of stress not seen since 2012.
As well as the Commission’s approval, the EU’s 27 countries still have to ratify France’s multi-year spending plan during a meeting of finance ministers in January next year.
France would then have an extended period of seven years to bring public spending in line with key EU parameters. The extension is part of the EU’s revamped fiscal framework which allows countries to benefit from a further three years to get their house in order provided they complete a set of pre-agreed reforms with the Commission.
Brussels can sanction countries that fail to carry out the promised amendments by reducing the timeframe.
In France’s case, the Commission has agreed to its review of tax expenditures, which involve exemptions and deductions from the normal tax code that reduce overall government revenue.  
To secure the extra time, Paris must also deliver on its promises to dilute the phase-out of a discount on social contributions for people close to the minimum wage.
In response to the Commission’s evaluation, outgoing EU economy commissioner, Paolo Gentiloni, praised Barnier’s efforts to enforce fiscal discipline in his country.
“I think we have a strong commitment on the French side, and also I would say a courageous commitment considering the difficulties of the numbers in the [French] National Assembly,” he told a press conference in Brussels on Tuesday.
“I’m very positively impressed that in this challenging situation, French authorities presented their plans, and these plans … are good.”
A French Treasury official, granted anonymity to speak freely, told POLITICO the Commission would, however, downgrade its evaluation if France’s highly contentious pension reforms were withdrawn from the package, as is being demanded by both the far-right and far-left.
This article was updated with comments from Gentiloni.
(Giorgio Leali contributed to this report)