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French Prime Minister François Bayrou survived a no-confidence vote in the National Assembly on Wednesday and pushed through a delayed 2025 budget aimed at taming the country’s deficits.
The vote was triggered by Bayrou’s move on Monday to use a constitutional clause to ram the budget through parliament — an unavoidable gambit since he has no majority and French opposition parties have refused to back government budgets.
His predecessor, the conservative politician Michel Barnier, used the same constitutional method but lost the censure vote and was toppled after barely three months when the left and the far right joined forces to oust him.
Bayrou succeeded by negotiating budget concessions with the moderate-left Socialist party (PS), whereas Barnier focused his efforts on winning the tacit support of the far right, led by Marine Le Pen.
The prime minister admitted to lawmakers that the budget was “imperfect” and “not the one that we hoped for” but argued that it was urgent to pass it to ensure stability for the economy, households and investors.
The budget vote should deliver at least a temporary respite from political turmoil in France, after President Emmanuel Macron churned through four prime ministers since early 2024.
Gridlock has worsened since Macron called snap elections last summer, only to lose them and face a National Assembly fractured into three similar-sized blocs.
Financial markets have been reassured this week by the prospect that the budget would finally be approved. The spread of France’s 10-year borrowing costs over Germany’s has fallen to 0.71 percentage points, still high by the standards of recent years but below the peak of 0.9 percentage points reached in November.
The Socialists — who were the crucial swing vote on Wednesday instead of Le Pen’s Rassemblement National — abstained in the no-confidence vote in the name of averting an outright political crisis. They broke for the first time with the rest of the leftist alliance and its biggest component, the far-left La France Insoumise (France Unbowed), which accused them of betrayal.
The PS defended itself by saying it had forced the government to back down on cutting 4,000 teachers and on raising the cost of healthcare and medicines for consumers. In a potentially bigger shift, Bayrou also opened the door to “renegotiate” Macron’s unpopular increase to workers’ retirement age from 62 to 64. Unions and lawmakers will hold talks on pensions in the coming months.
Only 128 members of the National Assembly voted to topple Bayrou — those from the far-left LFI, the Communists, and the Greens — far short of the 289 needed for a majority.
The delayed 2025 budget is less ambitious in terms of deficit-cutting than the previous government’s version, promising a fiscal package of €50bn in tax increases and spending cuts, down from €60bn earlier.
An independent oversight council estimated that 90 per cent of the fiscal effort would come from tax increases, not spending cuts. Some €8bn in revenue will come from temporarily hitting the biggest corporations with a new tax, other charges on companies will raise a further €4bn, and the wealthy will pay additional tax to raise €2bn.
Overall spending will still increase, despite a significant cut to ministries’ budgets, largely because little was done to address pensions and healthcare that account for about half of government spending.
France’s deficit has ballooned in recent years because of generous financial support for workers and companies during the Covid-19 pandemic and subsequent energy crisis. Macron’s pro-business policies also included unfunded tax cuts aimed at boosting growth and employment.
The country’s degraded public finances became a major issue last year as the government repeatedly overshot its own deficit targets to finish the year with a budget shortfall of about 6 per cent of GDP. France plans to raise about €300bn from bond investors this year — a historically high level. As interest rates rise, its borrowing costs are forecast to hit €54bn this year, around the same as the defence budget.
Bayrou’s government has pledged to bring France’s deficit down to 5.4 per cent of national output by the end of this year; Barnier’s aimed to reach 5 per cent of GDP.
France remains far above the 3 per cent of GDP deficit ceiling set by the EU, and is among the worst performers in the region. Brussels has put it on a watchlist of countries with excessive deficits and it will be monitoring closely to see whether France delivers.
Additional reporting by Ian Smith in London
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