In the first major hurdle for the recently-installed French Prime Minister Michel Barnier, the battle over the nation’s budget began on Wednesday, with both Marine Le Pen’s populist faction and the far-left New Popular Front rejecting the austerity measures.
With France facing economic calamity, with soaring debt levels and persistent budget deficits, Prime Minister Barnier submitted his proposals to the National Assembly parliament on Wednesday, which includes 60 billion euros in tax hikes and spending cuts.
Pitched as a temporary emergency measures, the neo-liberal government proposed raising tax hikes on 24,000 of the wealthiest households in the country as well increasing the taxes of around 400 top companies.
However, businesses and wealthy individuals would not be the only to feel the pinch, with the government also proposing tax hikes on electricity, cars, and air travel. Meanwhile, the government would freeze increases for state pensions and reduce government reimbursement for medical bills and sick leave.
While asking the French public to shoulder a larger burden, the austerity push would not include any cuts to the nation’s defence budget, which has seen a big boost in funding as Paris continues to subsidise the war in Ukraine.
The measures proposed by Barnier come as France is facing the prospect of having the EU withhold funds it redistributes among member states if it fails to return to the bloc’s budget deficit limit of 3 per cent of GDP by 2029. Currently, the deficit stands at over €154 billion, or around 5.5 per cent, and there are fears that it could soon rise to 6.1 per cent.
Meanwhile, following the spending spree to keep the country afloat during the draconian coronavirus lockdown restrictions imposed by Macron’s government, as well as the ongoing energy crisis in Europe sparked by the war in Ukraine, France’s national debt has climbed above €3 trillion, meaning that the debt now outweighs the entire GDP of the country.
The budget marks the first major challenge for Prime Minister Barnier, the former EU Brexit negotiator who was installed in the Hôtel Matignon by Macron in September, despite Barnier’s and Macron’s parties receiving fewer votes than both Marine Le Pen’s populist National Rally (RN) party and the leftist New Popular Front (NFP) coalition.
The Barnier government has a figurative Sword of Damocles hanging over its head, as Le Pen could collapse the government whenever it choses to by merely joining the tabled NFP censure motion, giving the National Rally strong leverage over the agenda of the government.
While Le Pen and her allies have so far refrained from joining the effort to topple the government, arguing that Barnier should be given the opportunity to govern, it has not ruled out the idea entirely.
Commenting on the prospect of joining the censure motion, National Rally MP Jean-Philippe Tanguy said per Le Point: “Without fundamental change, the question of censorship will arise… if censorship were to come, it would be above all a refusal of [the] budget.”
The populist party, which is mostly left-wing in its economic orientation despite being branded by the legacy media as “far-right”, has said that it will not support the budget in its current form. Among its grievances, the National Rally has demanded that the government scrap tax hikes on electricity and cars, warning that it would put an undue burden on working people. In a counter proposal, the RN said that the government should seek to impose taxes on foreigners and to increase taxes on share buybacks.
RN party president Jordan Bardella said Wednesday: “We will not vote for the budget because it is a budget that picks the pockets of working France, a budget that will impose on the working and middle classes an increase in the price of gas and electricity.”
The leftist New Popular Front bloc, a coalition of communists, socialists, greens, and other radical leftists, also vowed vote against the current budget proposals, calling for the government to impose more tax increases, particularly on oil and gas firms. Even members of Macron’s coalition have even expressed concerns over the budget, with the globalist-corporatist MoDem party saying that it disapproves of planned tax hikes on businesses and the wealthy.
With opposition from every direction, the budget could be heavily changed, with around 1,700 amendments tabled on Wednesday. However, Prime Minister Barnier could sidestep the French parliament entirely to pass the budget. Should a compromise fail to materialise, Barnier could invoke article 49.3 of the French constitution, which would allow him to make the budget law without a vote in the National Assembly.
The “nuclear option” article was infamously deployed by former Prime Minister Élisabeth Borne in 2023 to implement Macron’s rise of the pension age. The move sparked months of protests and riots, ultimately culminating in Borne being replaced. The only means of preventing the use of article 49.3 would be a vote of no confidence in Barnier, meaning that Le Pen’s party would need to join the leftist NFP if it wanted to block the budget.
However, complicating matters is the fact that Macron is barred from calling for another round of legislative elections until June of next year, meaning that if Barnier’s government were to be toppled in a no-confidence vote, France could potentially be left without an actual government and therefore unable to solve the budget crisis until next year.