several EU countries are facing significant budget challenges, with France standing out as the nation currently experiencing the most severe budget crisis. Here’s an overview of the situation:

France

France is currently in the midst of a major budget crisis and political turmoil:

• The country’s public deficit is estimated at 6.1% for 2024, significantly above the EU’s 3% limit.

• Without a new budget, France is facing a potential deficit of 6.3-6.6% of GDP in 2025, more than double the EU’s standard.

• Prime Minister Michel Barnier’s government collapsed after failing to gain support for budget proposals.

• The political instability is weakening France’s influence in EU debates at a critical time.

Italy

While not explicitly detailed in the search results, Italy is mentioned as one of the highly indebted countries facing potential budget issues:

• Italy, along with France, may face a “black hole” in its budget due to the introduction of reformed EU spending rules and the European Commission turning off pandemic-related funding.

Other EU Nations

The search results indicate broader challenges across the EU:

• The EU general government deficit is expected to be 3.1% of GDP in 2024, just above the 3% limit.

• The aggregate debt-to-GDP ratio of the EU is projected to increase from 82.1% in 2023 to 83.4% in 2026.

• Even traditionally fiscally conservative countries like Austria and the Netherlands are encountering difficulties adhering to EU deficit guidelines.

Economic Outlook

The overall economic situation in the EU is concerning:

• GDP growth is projected to be modest, with 0.9% for the EU and 0.8% for the euro area in 2024.

• There is a risk of a “lost decade” if insufficient investments are made.

• The EU faces various downside risks, including geopolitical tensions, potential protectionist measures, and the impact of natural hazards.

In conclusion, while several EU countries are facing budget challenges, France appears to be experiencing the most severe and immediate budget crisis, compounded by political instability. The situation in France is particularly critical given its significance as the second-largest economy in the EU, representing 16.6% of the bloc’s GDP.