New French PM focuses on 'excessive' debt in first key parliament speech

AFP , Tuesday 14 Jan 2025

France's prime minister Francois Bayrou on Tuesday warned parliament about his country's spiraling debt and said he was ready to reopen talks on pension reform, hoping to avoid a no-confidence vote that could prolong the country's rumbling political crisis.

French Prime Minister Francois Bayrou
French Prime Minister Francois Bayrou delivers a general policy statement to MPs at the National Assembly in Paris. AFP

 

"The task that the country has set us is to return to stability," he said in his first policy speech to a divided parliament.

Bayrou, who became France's fourth prime minister in a year when he took office a month ago, faces a huge challenge to get an agreement on a long-overdue budget plan for 2025 and resolve bitter disputes over a 2023 pension reform.

Like his predecessor Michel Barnier, who lasted just three months before being deposed in a no-confidence vote, Bayrou lacks a majority in the National Assembly and could be dispatched just as easily if he fails to win at least tacit backing from enough opposition deputies.

French politics was plunged into chaos last year when President Emmanuel Macron called an election to break political deadlock but the vote returned a hopelessly divided lower chamber.

A sustainable budget plan for this year is the priority for Bayrou, 73, after Barnier's austerity budget was jettisoned along with his government.

Bayrou has been negotiating with the various blocs, with the far-right and most of the left rejecting deep spending cuts.

But Bayrou is mindful of the need to tackle France's spiraling deficit and growing debt mountain.

He zoomed in on the issue in his speech, saying it was his government's greatest worry.

"This debt is a sword of Damocles over our country and social model," Bayrou said. "We have many reasons to worry, but one emerges with resounding force: our excessive debt."

His government is under pressure from the European Commission for overspending and from high refinancing costs demanded by financial markets.

Pension reform 
 

Bayrou said that the 2025 public-sector deficit target was now projected at 5.4 percent of gross domestic product (GDP), against the five percent targeted by Barnier's administration.

Economic growth was projected at 0.9 percent for the year, down from a 1.1 percent target by the previous government.

A deficit level of three percent of GDP, demanded by EU deficit rules, would be reached in 2029, Bayrou promised.

Bayrou has concentrated on winning over centre-left Socialist deputies but no deal has been announced.

"They give the impression of being very active," said Green party leader Marine Tondelier about the government's efforts at compromise. "But the outcome is meager," she told AFP.

Most observers expect the far-left France Unbowed (LFI) party to lodge a no-confidence motion after Bayrou's speech but this cannot pass without Socialist backing.

Beyond the budget, a 2023 law to reform France's fragile pensions system has most opposition up in arms, with Socialists and other leftist parties demanding it be scrapped.

The plan notably includes a gradual increase in the retirement age to 64 years from 62.

In a major departure from his predecessor's policies, Bayrou said he was ready to reopen discussions on the pension reform.

He had "decided to put this issue back on the table, with the social partners, for a short time and under transparent conditions", Bayrou said.

But he warned that if no agreement was reached, the 2023 pensions law would remain intact.

Macron, in his traditional New Year speech last month, acknowledged that his decision to dissolve the National Assembly had led to "divisions" and "instability".

Constitutional rules mean new legislative elections cannot be called until July.

Some opponents have called on Macron, who has more than two years of his presidential term left, to resign, but the president has ruled out stepping down before his mandate's end.

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