Higher taxes for the richest people and some big companies. French Prime Minister Michel Barnier intends to use these measures to fill a huge hole in public finances. At the same time, he promises to protect the middle and lower classes. The 2025 budget is the main headache for the new French government, which was born on September 23, more than two months after the July elections.
The statements of the tenant of the Matignon building are causing some concern in a National Assembly that has never been so fragmented. Both the left-wing opposition, represented by the New Popular Front, and the far-right Rassemblement National, are promising to vote no confidence. Barnier, who previously negotiated Brexit in Europe, is aiming to convince followers of Marine Le Pen and Jordan Bardella to support him, promising more stringent measures on immigration. The possibility of higher taxes for the rich could, however, dissuade them.
Deficit on the rise for France
France needs to contain a rapidly growing budget deficit, but the prospect of more taxes scares the country. And Barnier knows it. “They will not raise taxes further for all French people, not for the most modest, not for people who work, not for the middle classes, but I cannot exclude the richest from the national effort to rectify the situation,” the prime minister reassured on France 2 television on September 22. France’s total debt is 110% of GDP, or about 3.2 billion euros.
Tax revenues were weaker than expected, while local authorities spent much more. The public sector budget deficit thus plummeted, exceeding 5% of GDP (Gross Domestic Product), in violation of European Union rules that set the threshold at 3%. The situation has also raised the eyebrows of rating agencies, which are closely scrutinizing France’s decisions. “A large part of our debt has been placed on international and foreign markets. We must maintain France’s credibility,” Barnier said in the interview broadcast on French television.
More taxes for the rich in France
The former Brexit chief negotiator must make up for lost time as the budget preparation has suffered an unprecedented delay. The head of government described the country’s budget situation as “very serious.” While stressing that “the richest must participate in the solidarity effort,” Barnier did not explicitly mention the reintroduction of a wealth tax, which the left has instead called for.
Why Macron’s move is an opening to Le Pen’s far-right
The new prime minister said he was “open to changes” to improve the controversial pension reform implemented last year by President Emmanuel Macron. Any changes, Barnier stressed, should not compromise the precarious finances of the pension system. Those to be protected would include, for example, working mothers, who face many difficulties during long careers but with lower remuneration.
Barnier’s team of ‘perfect strangers’
The government team, composed of 39 members, meets for the first time on September 23 for a “government breakfast”, aimed at strengthening relations between the members. The Council of Ministers is the result of a coalition formed mainly by right-wing members of Les Républicains and centrists of Renaissance, the party of the French president. A team where there is little knowledge and confidence. A meeting is scheduled for 3 pm on the same day with Macron, the man who has worked for a long time to create a government that would exclude at all costs the members of the New Popular Front, the left-wing coalition that had obtained the most votes at the polls, but without winning a majority in the National Assembly.
The risk of immediate no-confidence for Barnier
The new government risks an immediate vote of no confidence, as both the left-wing and far-right oppositions threaten. The prime minister is mainly aiming to convince Marine Le Pen and Jordan Bardella’s Rassemblement National to support him, even if they do not officially join the government team. Among the weapons of seduction: Barnier’s promise to be tough on immigration. “We need a European response. We must act at home too,” said the head of government.
“We need to address the issue of immigration much more rigorously,” he added, without specifying the modalities. No possibility of mediation seems possible with the NFP coalition, which has already scheduled a motion of censure for October 1, when Barnier’s general policy speech will be presented. Jean-Luc Mélenchon, leader of La France Insoumise, has asked that this “government of losers be eliminated as soon as possible”, having “neither legitimacy nor a future”.
