Nightmare for Emmanuel Macron as French economy issued £21bn black hole warning

Emmanuel Macron faces a fresh nightmare with France facing swingeing cuts to plug a £21billion black hole in its finances. Outgoing Economic Minister, Bruno Le Maire, has said €25bn (£21bn) worth of savings need to be found this year. This week he imposed new spending limits on ministries in a bid to save €5bn (£4.2bn).

Paris has already imposed €15bn (£12.6bn) in government spending cuts, with plans to save more from local authorities and to tax energy firms more in the pipeline.

Mr Le Maire told French finance daily Les Echos he is at his desk from 7am to 10pm preparing the country's next Budget as he seeks to bring France's public deficit down to the equivalent of 5.1 percent of gross domestic product (GDP) this year.

The next Finance Act is due to be debated in the Autumn, but its passage through the National Assembly may prove tricky depending on which parties form the majority after no single party secured overall control of the French parliament in the second round of snap elections last week.

In a bid to underline the seriousness of France's finances, Mr Le Maire, writing in Le Figaro, said: "Let's be precise: in 2024, we need to make €25 billion in savings to meet our public finance targets.

"We have to do this now, or it will be too late because France will diverge definitively from its 19 Eurozone partners. That would be a major economic and political mistake."

Paris is under mounting pressure to get its financial house in order, with the European Union poised to take action over France's public deficit, which increased to 5.5 percent last year, 2.5 percentage points higher than an EU-imposed limit. France wants to get the deficit below three percent by 2027.

The country must also cut its debt, which is pushing 111 percent of GDP, way above the EU-mandated 60 percent.

But according to the French daily, Le Parisien, Mr Le Maire's successor in the next government may have to tighten the purse strings even further, with civil servant bonuses, legislative elections and a crisis in New Caledonia expected to pile up costs even more.

It is yet another headache for Mr Macron, with France already on the brink of paralysis since Sunday's vote for the National Assembly resulted in a split between the New Popular Front leftist coalition, the French president's centrist allies and the far-right National Rally of Marine Le Pen.

The New Popular Front won the most seats but fell short of an outright majority to govern on its own. The alliance's three main parties - the hard-left France Unbowed, the Socialists and the Greens - have urged Mr Macron to turn to them to form the new government.

Sophie Binet, General Secretary of France's influential hard-left CGT union, said in an interview with French broadcaster LCI on Thursday that if Mr Macron didn't respect the results of the election, he risks plunging the country deeper into chaos.

Asked about strikes, which could disrupt the biggest sporting event France has ever organised, she said: "At this stage, we don’t plan a strike during the Olympic Games. But if Emmanuel Macron continues to throw gasoline cans on the fires that he lighted..."

CGT has an open call for potential strikes by public service workers from July through to September. The Olympics will run from July 26 to August 11.