Overview

• Bayrou unveiled a two-pillar strategy rooted in fiscal balance and production support that combines €40 billion in savings with a €3.5 billion defense boost.
• He set a target of reducing the budget deficit to 4.6 percent of GDP in 2026, down from an estimated 5.8 percent in 2024.
• An 'année blanche' will freeze select public expenditures to last year's levels regardless of inflation alongside cuts to ministries, agencies, and tax expenditures.
• The government ruled out broad tax hikes, opting instead to remodel the high-income contribution and explore targeted levies on wealth.
• Bayrou's narrow parliamentary majority leaves him vulnerable to censure motions, with the Rassemblement National holding decisive sway.