France eyes cuts to business subsidies and healthcare spending

PARIS (Reuters) – France’s government aims to rein in spending on business subsidies and medical care as part of plans to come up with 12 billion euros in savings from 2025, government sources said on Thursday.

President Emmanuel Macron’s government needs to bring down France’s public spending – the highest in the world relative to the size of the economy – to keep its deficit reduction commitments on track.

The 2024 budget bill currently going through parliament includes plans for 16 billion euros ($17.35 billion) in savings, most of it from phasing out temporary power and gas price caps.

Prime Minister Elisabeth Borne told ministers on Thursday they needed to identify an additional 12 billion euros in savings from 2025 as part of a regular spending review process, government sources said.

Various public funds that support businesses and spending on medical care were singled out with other targets to be defined in further meetings, they added.

Public financial support of the corporate sector currently costs 110 billion euros annually though a range of cash handouts and tax breaks.

“We’re expecting proposals to cut or reduce aid that is considered to be the least efficient or positive or the most redundant,” one of the sources said.

The government also wants to rein in fast-growing health spending by taking a hard look at the some 80,000 medical products that are currently partly subsidised at cost of 16 billion euros a year, a second source said.

France has committed to its EU partners to cut its public sector budget deficit from 4.9% of economic output this year to an EU limit of 3% in 2027, which its own public audit office says lacks ambition.

($1 = 0.9223 euros)