PARIS (AP) — The French president and prime minister managed to form a new government just in time for the holidays. Now comes the hard part.
Crush the debtincreasing pressure from the nationalist far right, wars in Europe and the Middle East: there is no shortage of challenges for President Emmanuel Macron and Prime Minister François Bayrou after an already tumultuous 2024.
What’s wrong with French finances?
The most urgent agenda is the adoption of a 2025 budget. Financial markets, rating agencies and the European Commission are pushing France to reduce its deficit, comply with European rules limiting debt and prevent France’s borrowing costs to soar. It would be threaten the stability and prosperity of all countries who share the euro currency.
France’s debt is currently estimated at 112% of gross domestic product. It rose further after the government provided aid to businesses and workers during COVID-19 lockdowns, even as the pandemic dampened growth, and capped domestic energy prices after the Russian invasion of Ukraine. The bill is now due.
But France the previous government collapsed this month because Marine Le Pen’s far-right party and left-wing lawmakers opposed 60 billion euros in spending cuts and tax increases in the initial budget plan for 2025. Bayrou and the new Minister of Finance Eric Lombard should reverse some of these promises, but the calculations are difficult.
“The political situation is difficult. The international situation is dangerous and the economic context is fragile,” said Lombard, a low-key banker who advised a socialist government in the 1990s when he took office.
“The environmental emergency, the social emergency, the development of our businesses, these countless challenges force us to treat our endemic disease: the deficit,” he declared. “The more we are in debt, the more expensive the debt is and the more it suffocates the country. »
How long will this government last?
This is the fourth French government in the past year. No party has a parliamentary majority and the new government can only survive with the support of center-right and center-left lawmakers.
Le Pen – Macron’s fiercest rival – was instrumental in toppling the previous government by joining left-wing forces in a vote of no confidence. Bayrou consulted her during the formation of the new government and Le Pen remains a powerful force.
That angers left-wing groups, who expected more influence in the new government, and who say promised spending cuts will hit working families and small businesses hardest. Left-wing voters, meanwhile, feel betrayed since a left-wing coalition won the most seats in early summer parliamentary elections but failed to secure a government.
The possibility of a new vote of no confidence looms, although it is unclear how many parties would support it.
And Macron?
Macron has repeatedly said he will remain president until his term expires in 2027.
But the French constitution and current structure, dating from 1958 and called the Fifth Republic, were designed to provide stability after a period of turmoil. If this new government collapses within a few months and the country remains in political paralysis, pressure will increase for Macron to resign and call early elections.
The National Rally, Le Pen’s ascendant, intends to bring down Macron. But Le Pen faces her own headaches: A March court ruling over alleged illegal party financing could see her banned from running for office.
What else is on the agenda?
The National Rally and far-right Interior Minister Bruno Retailleau want stricter rules on immigration. But Bayrou wants to focus on how the existing rules work. “There are many laws (on immigration). None are applied,” he declared Monday on the BFM-TV channel, criticized by the conservatives.
Military spending is a key issue amid fears over European security and pressure from U.S. President-elect Donald Trump for Europe to spend more on its own defense. French Defense Minister Sébastien Lecornu, who defends military aid to Ukraine and to increase arms production, retained his position and stressed in a press release on Tuesday the need to confront the “accumulated threats” against France.
In the immediate future, Macron wants an emergency law in early January to allow accelerated reconstruction of the country. French territory of Mayotte ravaged by a cyclone in the Indian Ocean, off the coast of Africa. Thousands of people are in emergency shelters and authorities are still counting the dead, more than a week after the damage.
Meanwhile, the government of New Caledonia, a French territory in the South Pacific, collapsed on Tuesday following a wave of resignations of pro-independence figures – another challenge for the new foreign minister, Manuel Valls, and the new government.
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Associated Press writer David McHugh in Frankfurt contributed.