New French Prime Minister Upholds Predecessor’s Budget Amid Political Tensions

French Prime Minister François Bayrou is under intense pressure to deliver a national budget for 2025 following a political crisis that led to the ousting of his predecessor, Michel Barnier. In a bid to meet the urgent deadline, Bayrou has decided to continue with Barnier’s controversial budget proposal despite its contentious legacy.

Barnier’s budget was a source of significant opposition, proposing deep cuts of €40 billion in spending and €20 billion in tax hikes. This plan was ultimately a key factor in Barnier’s government collapsing after a no-confidence vote in December. The collapse left France without a finalized budget for the first time in its modern history. However, Bayrou’s decision to use Barnier’s blueprint as a starting point is more about expediency than endorsement. Drafting a new plan would require a lengthy legal process, potentially delaying the passage of the 2025 budget further.

As a temporary solution, lawmakers have approved a stopgap measure, allowing the 2024 budget to carry over into the next year. However, this workaround has its flaws. Notably, it does not account for inflation adjustments to tax brackets, which could result in higher taxes for many households.

Bayrou, who leads a minority government, faces an uphill battle to secure the support of opposition parties. These same parties helped oust Barnier and could pose a similar threat to Bayrou’s government. To avoid another no-confidence vote, Bayrou and Budget Minister Amélie de Montchalin are reaching out to opposition leaders, hoping to secure compromises before Bayrou’s first policy speech on January 14.

While the decision to stick with Barnier’s plan may save time, it limits Bayrou’s ability to make significant changes, as lawmakers will only be able to amend, not overhaul, the proposal.

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