France's Budgetary Urgency: A New Government's First Step

In France, the urgency surrounding the country’s budget was at the center of the first meeting of the new Cabinet. President Emmanuel Macron called on the Executive to display both "unity" and "boldness" to swiftly adopt a budget following the previous government's rejection. This meeting marked the beginning of the Bayrou administration’s work. Macron emphasized the need for cooperation while also urging audacity in overcoming the challenges ahead, as highlighted by government spokesperson Sophie Primas.

One of the government's main priorities is to finalize the 2025 budget, a task that had been left incomplete due to the prior government’s rejection. The previous Executive had projected a public deficit of 5% of GDP for the year. According to Primas, the new government's target for the 2025 public deficit will be shaped by discussions with political forces in Parliament before Prime Minister François Bayrou’s speech on January 14.

The final deficit figure will be determined by consultations and negotiations that will take place at the Ministry of Finance, as well as discussions on the Social Security financing law. This collaborative approach will set the tone for further dialogue, Primas explained.

French ministers for the Economy, Eric Lombard, and for Public Accounts, Amélie de Montchalin, have planned consultations with political representatives in Parliament to include them in the budget preparation process. Initial discussions began on December 30, and more formal meetings are expected to begin on Monday.

These consultations, which will continue until the Prime Minister's general policy speech, are expected to result in recommendations that will influence the 2025 budget. While the spokesperson could not provide a precise schedule for the budget’s examination, she suggested that major orientations would likely be outlined in the policy speech.

In December, Bayrou had expressed hope that the budget would be adopted by mid-February, with a plan to build upon the draft that had been previously voted on by Parliament before the rejection. Meanwhile, in preparation for the 2025 budget's adoption, the French government extended the budget authorizations outlined in the 2024 finance law through a decree published in the official journal at the end of December.