PARIS, France (AFP) — Newly-installed French Prime Minister Michel Barnier told lawmakers Tuesday he’ll push for a combination of higher taxes and spending cuts to trim France’s ballooning budget deficit, but will still miss targets set by the previous Government.

“Our aim is to reduce the deficit to five per cent [of GDP] in 2025, on the right path to reach the three-per cent ceiling in 2029,” meeting the European Union (EU) target two years later than previously planned, Barnier said as he laid out his Government’s policy programme.

He called France’s debts of over 3.2 trillion euros (US$3.5 trillion)
— more than 110 per cent of GDP
— “the true sword of Damocles hanging over the head of France and of every French person”.

“Paying off debt is the second-largest line item in government spending behind education,” Barnier said.

“Is it acceptable for us to spend more on interest payments than on our defence or research? My answer is no,” he added.

Barnier said that the Government would find “two-thirds” of its planned 2025 deficit reduction by cutting spending, facing repeated heckles from the left of the chamber but garnering applause from his minority conservative camp.

Public spending amounts to 57 per cent of GDP, he pointed out, compared to 49 per cent on average across Europe.

But the Government would “pay special attention to the most vulnerable people, for whom health and education services are vital”, Barnier said.

On the revenue front, France already has “among the highest taxes in the world”, he noted.

But there would be “a time-limited effort that must be shared, with an insistence on tax justice” or equitably sharing the burden, Barnier added.

Notably, the Government would “ask big companies making large profits to contribute to the recovery without calling our competitiveness into question”.

Paris would also “ask for an exceptional contribution from the wealthiest French people to prevent the tax avoidance strategies of the biggest taxpayers,” Barnier said.

Barnier, a right-wing former EU Brexit negotiator, was appointed by centrist President Emmanuel Macron to bring some stability after the political chaos created by a hung Parliament that resulted from snap elections this summer.