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French premier François Bayrou has staked his government’s survival on striking a deal with the Socialist party, betting he can offer concessions to convince left-leaning MPs to pass a belt-tightening budget.
Allies say the veteran centrist, whose government has no majority in parliament, has no realistic option but to try to persuade Socialists to abstain and break the political gridlock over the budget.
Marine Le Pen’s far-right Rassemblement National, the other key swing voting bloc, is considered a less reliable negotiating partner since its MPs toppled Michel Barnier’s government last year, despite winning budget concessions.
“Our fate is firstly in the hands of the Socialists,” said an adviser to Bayrou. “If we cannot get them on board, then we’re dead for sure.”
France will again be walking a tightrope in the autumn to pass a budget for 2026 given the political deadlock since president Emmanuel Macron called snap elections last year, only to lose them and usher in an even more fractured assembly.
Bayrou on Tuesday unveiled the outlines of a €44bn fiscal package for 2026 that includes a spending freeze on all areas of government, excluding defence, as well as on pensions and social welfare benefits.
Among a raft of measures, he also said he wanted to scrap two days of national holiday to generate an estimated 4.2bn more revenue, an idea that prompted howls across the opposition. He suggested cutting Easter Monday and Victory in Europe Day on May 8.
Another pledge was to tighten eligibility for unemployment benefits, which has been done twice since 2019 under Macron.
The country’s deficit ballooned to 5.8 per cent of GDP last year, the second worst in the Eurozone after Slovakia. The aim is to begin to narrow the deficit to 4.6 per cent next year, although the overall national debt will continue to rise in the coming years. Analysts doubt that Bayrou will hit the 2026 target.
Borrowing costs have ticked higher and risk squeezing out other areas of government spending. Interest paid on the national debt reached €44.5bn last year, according to the finance ministry, which is roughly the size of the defence budget.
Without a majority in the assembly, Bayrou will have to use a constitutional clause to override lawmakers to pass the budget. That then opens the government to a no-confidence vote in the 577 member assembly.
Bayrou has already survived eight no-confidence motions.
Le Pen has put the government on notice: “If Bayrou does not revise his plan, we will censure him.”
Senior Socialist leaders have not closed the door to negotiating with Bayrou, but greeted many of his ideas negatively, especially cancelling two national holidays and stricter unemployment benefit rules. They said the burden fell disproportionately on workers, retirees, and low-income people, and not enough on corporations and the rich.
“If what Bayrou presented yesterday is the budget, then in that case, we will have no choice but to vote for a motion of no confidence,” Arthur Delaporte, a Socialist MP, told the FT. “Because it’s completely unacceptable . . . Basically, he needs to seriously revise it.”
“We are not hostile to the idea of negotiating,” he continued, adding that they would make their own proposals in the autumn. “But the problem is the Bayrou method: he says he is open to discussion but then does nothing of the sort and sets definitive conditions before talking.”
Options to woo the Socialists could include giving them a say on the not yet defined “solidarity contribution” from the wealthy promised by Bayrou, said the adviser. Another would be to only cut one day of national holiday, not two.
But the main argument that the government will make is that the opposition needs to act responsibly and not plunge France into another political crisis that risks triggering an economic crisis.
Finance minister Éric Lombard told Bloomberg on Wednesday that he was “confident” that the budget would be approved and that it was normal that the opposition would initially resist given the size of the fiscal package.
Lombard, a former banker, is likely to play a key role in trying to win over the Socialists since he has good relationships with senior party figures. Lombard worked as an adviser to Socialist finance minister Michel Sapin in the 1990s.
“We will talk to all parties because it is an issue of national interest,” he said. “Obviously there are probably more possibilities to reach an approval with the Socialist party,” he added, pointing out how they allowed the budget to pass for 2025.
