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yesterday

Bayrou Unveils 43.8 Billion-Euro Austerity Plan as Government Faces Confidence Test

Bayrou’s minority administration seeks to freeze non-defence spending to meet EU deficit rules under threat of a no-confidence vote

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Der französische Ministerpräsident François Bayrou bei der Vorstellung seines Sparpakets
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Overview

  • The 2026 budget framework aims to save €43.8 billion by freezing all public expenditures except defense, halving growth in social and health outlays, and proposing the elimination of Easter Monday and May 8 holidays.
  • A hiring freeze will leave one in three public service vacancies unfilled and social benefits and income tax brackets will not be adjusted for inflation, effectively cutting real outlays.
  • Defense spending is protected after President Macron pledged an additional €3.5 billion for 2026 and €3 billion for 2027 to bolster military readiness.
  • The government projects the deficit will fall to 4.6 percent of GDP in 2026 and under 3 percent by 2029 to comply with EU fiscal criteria and avert potential sanctions.
  • With debt at about 114 percent of GDP and growth forecasts downgraded, Rassemblement National and Socialist MPs have threatened to reject key measures, raising the stakes for a possible no-confidence vote in autumn budget debates.