France has recently become a focal point in Europe due to major financial and political challenges. Prime Minister François Bayrou has put a vote of confidence for the government on September 8. If parliament fails to support the government’s plan to cut the budget deficit by €44 billion, Bayrou could lose his position. This could make him the third prime minister to leave office in less than a year and a half — an unusual situation for France.
France’s national debt and budget deficit problems have worsened, and borrowing costs have risen to Italian levels, at times surpassing Greece. The French parliament is split between political forces with completely opposing views: the left wants higher taxes and more social spending, centrists and conservatives advocate increased defense spending without tax hikes, while the far right aims to cut costs by reducing migration and contributions to the EU.
After Macron’s election win in 2017, taxes for business and the wealthy were cut, but expenditure on social and public programs was not reduced. This led to a budget shortfall of over €60 billion annually and, eventually, to mass protests and extra spending, especially during the pandemic and the energy crisis. France’s national debt has grown from €2.2 trillion to €3.3 trillion.
Macron’s efforts to balance the budget have mainly involved raising the retirement age, sparking huge protests. The forecasted budget deficit for 2024 remains troubling, leading to a credit rating downgrade for France.
To resolve the political crisis, Macron dissolved parliament and called early elections, which failed to produce a clear majority. Bayrou temporarily raised business taxes and proposed reforms, but they have not gained political support. Far-right and left-wing leaders have called for new elections, expressing a lack of confidence in the government.
The situation in France remains tense, and financial risks for Europe are increasing. How France will overcome these challenges remains uncertain. For Ukraine, maintaining political backing from France is important, despite the country’s internal difficulties.
