European Union finance ministers will approve French Prime Minister Francois Bayrou's deficit-cutting plan on Tuesday as it complies with the EU's recommendations to bring the French deficit below 3% of GDP by 2029, officials said.

Senior officials of EU governments agreed last week to support Bayrou's plan, which will replace a more front-loaded scheme designed by his predecessor Michel Barnier that was rejected by the French Parliament in December.

"We are determined to reach the 3% deficit target by 2029, to be below by 2029," French Finance Minister Eric Lombard told reporters as he entered talks in Brussels.

The updated plan aims to cut France's budget deficit to 5.4% of GDP this year from what the European Commission estimated on Nov 26 would be 6.2% in 2024, but which in the end turned out to be 6.1%, according to the French finance ministry.

The Barnier plan aimed to reduce it more sharply in 2025 to 5.0% of GDP. Still, the end goal -- 3% of GDP in 2029 -- is the same for both plans and that was the EU condition for approval by the European Commission.

"The new plan stays within the requirements of the Commission," one EU diplomat close to the discussions said.

"Ultimately, the most important part is that the Commission takes its job seriously in monitoring the implementation of the plan and enforcing the rules if and when the French budget strays outside of the boundaries set in the plan," the diplomat said.(Cay) newsmaker23

Source: Investing.com