Bloomberg: French premier pledges budget cuts that toppled prior Cabinet

French Prime Minister François Bayrou has committed to a sharp reduction of the nation’s deficit, aiming to bring it down to 5% of GDP.

This bold fiscal plan, however, risks reigniting the political turmoil that led to the downfall of his predecessor’s government, Caliber.Az reports, citing Bloomberg.

Bayrou, who unveiled his new cabinet on Monday, will present his policy agenda to the French parliament on January 14, with a target to finalize the 2025 budget by mid-February. But the fragmented National Assembly, divided among left-wing, far-right, and centrist factions, poses significant hurdles. Early reactions to the newly formed government have been strongly negative, with opposition leaders warning that Bayrou’s efforts could trigger yet another no-confidence vote.

Jordan Bardella, leader of the far-right National Rally, labeled the administration a "coalition of failure," while Socialist Party head Olivier Faure denounced the government's formation as a “provocation.” These early tensions come after a summer of political unrest, when President Emmanuel Macron dissolved the National Assembly and called for early elections. The subsequent vote resulted in a divided lower house, with Macron’s centrists struggling to maintain control.

France’s finances are another pressing issue. The country has been out of compliance with European Union debt and deficit rules for years, and the current deficit stands at 6.1% of GDP. Bayrou’s challenge is to push through significant budget cuts next year, with France relying on emergency legislation for spending until a new budget is passed.

The stakes are high, as failure to pass a 2025 budget could further erode France’s financial stability. The country’s debt has already suffered a downgrade from Moody’s, which warned of weakened finances and a low probability of reducing fiscal deficits sustainably. As the government embarks on this difficult path, Bayrou faces an uphill battle to secure the necessary support in a fractured and contentious National Assembly.

By Khagan Isayev