Published by Global Banking and Finance Review
Posted on January 30, 2025
By Dominique Vidalon and Michel Rose
PARIS (Reuters) -A panel of French lawmakers were meeting on Thursday to thrash out the final text of a much delayed 2025 budget bill that is key to restoring investor confidence over the country's finances and the government's survival.
The seven senators and seven members of parliament were holding the closed-door negotiation to find a compromise before the bill heads to the lower house floor next week, when it could trigger a possible motion of no-confidence in the government.
France's failure to agree the 2025 budget has rattled investors while sapping business and household confidence. The government has had to make billions of euros in concessions to forge a bill with a chance of getting passed.
Socialist party officials upped the ante on Wednesday by briefly suspending the budget talks in protest over remarks by Prime Minister Francois Bayrou who said many French people felt "submerged" by immigration.
The left wing does not have a majority on the 14-member panel to block a compromise deal, but it could tip the balance against Prime Minister Francois Bayrou in the lower house, where a vote of no-confidence could be called as soon as Wednesday.
Eric Coquerel from the hard-left LFI party who heads the Finance Commission of the National Assembly, told reporters there was little suspense over Thursday's talks as there were eight parliamentarians from the right and six from the left in the panel.
"Given the power balance, one cannot see how a deal could not be reached," he said, adding the real battle would take place next week in the National Assembly, where his party would back a no-confidence motion.
"The motion of no-confidence will be the moment of truth."
NO CONFIDENCE MOTION
The attitude of Socialist politicians will be key next week and there is uncertainty about what they will do.
Boris Vallaud, the leader of Socialist lawmakers in the lower house, struck a constructive tone, telling reporters he was entering the meeting armed with amendments: "We have only one concern at heart, the country's interest," he said.
Other Socialist party officials said they could still back the motion of no-confidence next week if they were not satisfied.
Even if a deal is struck by the panel, French Prime Minister Bayrou will not be out of danger. He is expected to use constitutional powers to ram the budget compromise through without a regular vote, triggering the no-confidence motion.
Should the Socialists decide to back the motion to topple Bayrou, he would find himself dependent on the grace of the far-right Marine Le Pen's lawmakers again.
Bayrou could still fall if Le Pen decides to join the Socialists in backing the no-confidence motion.
(Reporting by Dominique Vidalon and Michel RoseEditing by Bernadette Baum and Toby Chopra)
