French finance minister says deficit reduction was top priority before Moody’s warning

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By David Lawder

WASHINGTON (Reuters) – French Finance Minister Antoine Armand on Friday, following a Moody’s credit rating warning on his country’s debt, said that France’s top fiscal priority is to reduce its public deficit to a targeted 5% of GDP by 2025.

Moody’s late on Friday revised France’s outlook to “negative” from “stable,” citing mounting uncertainty that the country will be able to curb widening budget deficits.

Speaking to reporters on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington, Armand said: “We noted the prospect of the negative outlook. We didn’t wait for the negative outlook to take the necessary measures” to control debt.

Armand said that France needed to foster growth as part of its drive to rebalance deficits and finance investments needed for the country’s clean energy transition.

“France’s top priority is to reduce its debt and its budget deficit, and the target would have a 5% target by 2025, referring to a budget plan unveiled earlier this month.

“It is not just a financial target. It’s also a political target, because it’s the beginning of the public finance consolidation that we aim at in France,” he said.

Armand declined to comment on the Nov. 5 U.S. presidential election when asked about the potential for high U.S. tariffs on European goods if Republican candidate Donald Trump is elected president.

But Armand said that France, the U.S. and other countries need to coordinate their policies opposing non-market trade policies such as those of China, adding that France shares U.S. concerns.

“At the very least, we need to coordinate answers against non-market practices, because if we don’t coordinate the answers to the non-market practices at the end of the day, it will create more disorder and more imbalances,” he said.