French Government Races to Finalize 2025 Budget Amid Political Uncertainty

Facing a divided parliament and urgent fiscal challenges, Prime Minister François Bayrou's administration seeks compromise to avoid another government collapse.

New Finance Minister Eric Lombard is targeting €50 billion in budget savings for 2025, down from the €60 billion proposed by the previous government under Michel Barnier.
The government aims to reduce the deficit to between 5% and 5.5% of GDP in 2025, compared to an expected 6.1% in 2024, while balancing economic growth and fiscal responsibility.
Consultations with political parties began this week, with the Socialist Party demanding significant concessions, particularly on social policies, to avoid a motion of censure.
Proposed measures include retaining taxes on corporate share buybacks and large enterprises, while avoiding new taxes or increased burdens on the middle class.
The government faces tight deadlines, aiming to finalize the budget by February, as the current 'special law' only temporarily extends 2024's budget framework.