French Prime Minister Michel Barnier has issued a stark warning about the country’s public finances, adding to the mounting pressure as he struggles to form a government amidst deep political divisions, Bloomberg reports.
“The country’s budgetary situation is very serious,” Barnier said in a press release. “I have requested all the information I need to assess its exact reality.”
Almost two weeks after being appointed, Barnier has yet to assemble a new cabinet that can reflect the diverse priorities of a deeply divided lower house of parliament and address France’s widening budget deficit.
Barnier has declared his commitment to curbing debt and embracing greater tax fairness. However, any indication of increased taxpayer burden has sparked opposition from lawmakers belonging to Emmanuel Macron’s parliamentary bloc, who are reluctant to deviate from the president’s pledge to avoid tax hikes.
Outgoing Interior Minister Gerald Darmanin asserted on France 2 television that it would be “out of the question” for the centrist group to join a government that implements tax increases.
Barnier’s conservative Republicans party holds a limited number of seats in a parliament fragmented into three major blocs: the leftist New Popular Front alliance, Macron’s centrists, and Marine Le Pen’s National Rally. To avoid being toppled by no-confidence votes, the new prime minister must secure some cross-party support, though the left has already pledged outright opposition.
Barnier has postponed a scheduled meeting with representatives of Macron’s group, including former Prime Minister Gabriel Attal.
“I am deeply focused on forming a balanced government in the near future, to methodically and seriously address the challenges facing our country,” Barnier said. “My aim is to restore growth and elevate the standard of living of the French people at a time when we are already the nation with the highest tax burden.”
The prime minister faces mounting pressure to reach a decision promptly to meet deadlines for presenting the 2025 budget. The outgoing government has cautioned that efforts to reduce the deficit will falter without further action to curb spending.
Bank of France Governor Francois Villeroy de Galhau has declared the caretaker administration’s plan to bring the budget deficit within the European Union limit of 3% of economic output by 2027 as no longer realistic and potentially detrimental to growth. He advocates for a revised five-year timeline, primarily relying on spending cuts, but also embracing taxation.
“It will be necessary to lift the taboo on raising taxes, without affecting the middle classes and small businesses, if possible,” he remarked in an interview with Le Parisien newspaper.
