The new French Prime Minister, Michel Barnier, in his opening speech to the National Assembly on October 1, reported serious problems with France’s public finances related to the country’s overall economic situation.
Barnier told MPs that his government expects the public deficit to reach 6% of GDP this year, instead of the EU standard of 3% set by Brussels in 2012 for EU member states.
According to the announced plans, the new French government intends to reduce the state budget deficit to 5% of GDP next year 2025 and up to 3% of GDP in 2029.
Thus, the financial problems of the Fifth Republic will not be resolved until the next presidential elections scheduled for 2027. This circumstance threatens to affect its results.
At the same time, the republican (i.e. Gaullist) Michel Barnier promises to solve the financial problems of the Fifth Republic with the help of big business and the richest French.
“The real sword of Damocles is our colossal financial debt, which, if we are not careful, will bring our country to the brink,” said the new prime minister. “The first way to fight debt is to cut spending” and the second is to “make spending efficient.” – added Prime Minister Barnier, also highlighting the most important thing: “the third remedy will be the most painful: budgetary pressure.”
“Our taxes are among the highest in the world, but the state of the budget now requires the effort over a limited period of time that we must make to achieve tax justice,” – Michel Barnier highlighted.
This means that the new government plans to increase “higher” taxes even further, promising these increases for a short period. Barnier said contributions would be needed from “large companies generating significant profits” and that “extraordinary contributions from France’s richest citizens” would also be needed.
It is true that “we will do all this without compromising our competitiveness,” the prime minister promises, going on to claim that “two-thirds” of the debt reduction effort by 2025 will be spent on cutting costs.
Let us note here the fact that Michel Barnier’s government is not stable. It does not have an absolute majority in the National Assembly. At the same time, the main coalition with the Republicans is the centrist presidential party. Emmanuel Macron clearly asks the new head of government, the Gaullist Barnier, not to change the financial policy of the last seven years, that is, not to increase taxes.
This disagreement on a strategic issue in the government coalition, which does not have a majority, became evident on October 1, when Prime Minister Barnier spoke of his program to reduce the budget deficit.
Let us remember that on September 5, 2024, at the age of 73, the republican Michel Barnier was appointed Prime Minister of France. He became the oldest prime minister of France during the Fifth Republic. Until now there was no one over 70 years old at the head of the French government. This circumstance especially highlighted the fact that Barnier’s predecessor as prime minister, Gabriel Attal She was 38 years younger than him.
Barnier’s appointment as prime minister sparked widespread protests across the country. It is obvious that Barnier’s declared program to solve the problem of public finances at the expense of big business and the rich is an indirect consequence of the victory of the left in the early parliamentary elections held in France in July. The Left Front did not receive a government for itself, but received a declared leftist decision from the prime minister, a veteran of center-right politics. And at the same time what was declared does not strengthen Barnier’s government.
