France's new prime minister, François Bayrou, is set to address parliament on Tuesday to outline his government's priorities amidst a lack of majority and unprecedented political turmoil. Bayrou's urgent task is to pass a budget bill for 2025 following the collapse of the previous government. An emergency law has been enacted to allow the state to collect taxes, cover basic expenses, and prevent a shutdown.
A proper budget is crucial to reduce France's deficit, fund essential expenses like defense measures in light of the conflict in Ukraine, and fulfill promises to distressed farmers. Pressure from financial markets, ratings agencies, and the European Commission necessitates France's compliance with EU debt regulations to maintain stable borrowing costs and safeguard the prosperity of eurozone nations.
France's deficit is projected to reach 6% of GDP in 2024, with the government aiming to reduce it to between 5 and 5.5% this year. Bayrou acknowledged the immense challenges ahead, likening them to scaling a metaphorical 'Himalaya.'
Bayrou's government, formed through a fragile alliance between Macron's centrists and conservative Republicans, lacks a parliamentary majority. To prevent another government collapse, Bayrou is seeking a nonaggression pact with the Socialists, who are open to discussions contingent on revisiting Macron's contentious pension reform.
The far-left France Unbowed party has already signaled its intent to file a no-confidence motion, while the far right, led by Marine Le Pen, remains a potent political force. Le Pen's National Rally party holds a significant presence in the National Assembly and could influence budget decisions.
The looming debate over pension reform, particularly Macron's proposal to raise the retirement age, remains a contentious issue. The Socialists are pushing for a suspension of the reform to allow for renegotiation, a move that could further test Bayrou's government's stability.
Despite the challenges, Bayrou's government is navigating complex political waters, balancing competing interests and seeking to secure the necessary support to pass critical budget legislation.
