French government tightens belt in budget for 2025
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France’s government delivered its 2025 budget on Thursday, proposing 60 billion euros ($65.68 billion) in tax hikes and spending cuts to address a growing fiscal deficit.
Prime Minister Michel Barnier’s newly formed government faced mounting pressure from financial markets and France’s European Union partners to act, following a significant shortfall in tax revenues and higher-than-expected spending this year.
However, the budget reductions, amounting to two percent of national output, had to be carefully balanced to appease opposition parties. These parties not only had the power to veto the budget but also could unite to bring down the government with a no-confidence motion.
Lacking a substantial majority, Barnier and his allies from President Emmanuel Macron’s camp will be forced to accept numerous concessions to pass the budget, which was not expected to be approved before mid-December.
The far-right National Rally, whose tacit support Barnier needed to survive any potential no-confidence vote, had already played a role in blocking a government proposal to delay a pension increase by six months, a measure aimed at saving 4 billion euros.
Meanwhile, members of Macron’s party were reluctant to see the president’s tax-cutting legacy undone. Former Prime Minister Gabriel Attal criticized the budget on Wednesday, saying, “It is light on reforms and too heavy on taxes.”
