Overview

• The budget aims to cut the deficit from about 6 percent of GDP in 2024 to 4.6 percent by 2026 to comply with the EU’s 3 percent ceiling.
• Proposed measures include freezing most social benefits, capping certain tax breaks and raising levies on retirees.
• President Macron has requested an extra €6.5 billion in defence outlays over the next two years, widening the fiscal shortfall.
• Without a parliamentary majority, Bayrou faces the threat of no-confidence motions from both left-wing and far-right parties if the savings measures are too severe.
• Financial markets and ratings agencies are watching to see if Bayrou will invoke constitutional tools to pass the budget and avert another political collapse.