French budget approved after François Bayrou survives censure vote

MT HANNACH
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French Prime Minister François Bayrou survived a vote without confidence in the National Assembly on Wednesday and brought a delayed budget in 2025 to tame the country’s deficits.

The vote was launched by Bayrou’s decision on Monday to use a constitutional clause to divide the budget by the Parliament – an inevitable gambit because it has no majority and French opposition parties refused to support government budgets .

His predecessor, the conservative politician Michel Barnier, used the same constitutional method but lost the vote of censorship and was swinged After barely three months when the left and the extreme right united their strengths to avoid it.

Bayrou Succeeded by negotiating budgetary concessions with the moderate leftist Socialist Party (PS), while Barnier concentrated his efforts on the victory of the tacit support of the extreme right, led by Marine Le Pen.

The Prime Minister admitted to the legislators that the budget was “imperfect” and “not the one we hoped”, but argued that it was urgent to adopt it to ensure the stability of the economy, households and investors .

Budget vote should issue at least a temporary respite Political agitation in FranceAfter President Emmanuel Macron has produced four prime ministers since the beginning of 2024.

Gridlock has worsened since Macron Called the SNAP elections last summer, only to lose them and cope with a National Assembly fractured in three blocks of similar size.

The financial markets were reassured this week by the prospect that the budget would finally be approved. The propagation of borrowing costs of 10 years of France on Germany fell to 0.71 percentage points, still high compared to the standards of recent years, but below the peak of 0.9 percentage point reaches in November.

The Socialists – who were the crucial voting of Swing Wednesday instead of the Le Pen national gathering – abstained in the vote without confidence in the abolition of a pure and simple political crisis. They broke out for the first time with the rest of the left alliance and its greatest component, the Farg-left La France Insoumise (France Undeed), which accused them of betrayal.

The PS defended itself by saying that it had forced the government to withdraw 4,000 teachers and increase the cost of health care and drugs for consumers. In a potentially larger change, Bayrou too opened it Bring to “renegotiate” the unpopular increase of Macron at the retirement age of workers aged 62 to 64. Unions and legislators will take place on pensions in the coming months.

Only 128 members of the National Assembly voted to overthrow Bayrou – those of the far left LFI, the Communists and the Greens – well below the 289 necessary for the majority.

The budget delayed in 2025 is less ambitious in terms of deficit of the deficit than the version of the previous government, promising a fiscal set of 50 billion euros in tax increase and in reduction of expenses, down 60 billion euros earlier.

An independent supervisory board estimated that 90% of the budgetary effort would come from tax increases, and not spending reductions. Some revenues of 8 billion euros will come from the temporarily typing of the largest companies with a new tax, other costs on companies will increase an additional 4 billion euros and the rich will pay an additional tax to increase 2 billion euros .

Overall expenses will always increase, despite a significant reduction in ministries’ budgets, largely because little has been made to treat pensions and health care which represent about half of public spending.

The French deficit has increased in recent years due to generous financial support for workers and businesses during the 19 Covid-19 pandemic and the subsequent energy crisis. Macron’s pro-enterprise policies also included unlikely tax reductions to stimulate growth and employment.

Last year, the country’s degraded public finances became a major problem while the government repeatedly exceeds its own deficit objectives to finish the year with a budget deficit of around 6% of GDP. France plans to remove around 300 billion euros from bond investors this year – a historically high level. As interest rates are increasing, its loan costs should reach 54 billion euros this year, almost the same as the defense budget.

The Bayrou government has committed to bringing France’s deficit to 5.4% of national production by the end of this year; Barnier aimed to reach 5% of GDP.

France remains well above 3% of the GDP deficit ceiling fixed by the EU, and is among the least efficient in the region. Brussels has put it on a surveillance list of countries with excessive deficits and it will closely monitor if France offers.

Additional report by Ian Smith in London

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