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French PM Bayrou's budget bill moves ahead as lawmakers strike deal on text
Published by Global Banking and Finance Review
Posted on January 31, 2025
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By Dominique Vidalon and Michel Rose
PARIS (Reuters) -A panel of French lawmakers on Friday agreed on the final text of a much-delayed 2025 budget proposal, paving the way for the lower house passage of a bill that is key to restoring investor confidence and ensuring the government's survival.
The bill will now head to a vote on the lower house floor next week. Although it could still trigger a no-confidence vote, lawmakers expressed confidence that the government was now looking more likely to withstand any challenge thanks to signals of tentative support from the left and far-right.
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; any failure to get it over the line will likely cut short Bayrou's premiership.
After the meeting, the Socialists struck a constructive tone, saying they were not thrilled with the text, but were happy to have obtained concessions to improve the lives of ordinary people.
"This was not our budget; we are an opposition party and we have made that clear," Socialist lawmaker Boris Vallaud told reporters. "We have managed to minimise the sufferings and the attacks on the purchasing power of retirees and patients."
Conservative Les Republicains (LR) deputy Philippe Juvin said "the budget does not satisfy anyone, but it's better than no budget."
Finance Minister Eric Lombard told TF1 television earlier on Friday that the government was sticking to its goal of bringing the public sector deficit to 5.4% of gross domestic product this year and was still vulnerable to a possible no-confidence motion.
The public sector deficit was forecast to hit close to 6% last year due to a shortfall in tax income and higher-than-expected spending.
Lombard later cheered the budget deal, writing on X that it was "an important step towards providing us with a budget and enabling our country to move forward."
Jean-Philippe Tanguy, a member of the lawmakers' panel from the far-right National Rally party, grumbled about the deal after it was agreed. He did not say whether his party would back a potential no-confidence motion next week, but acknowledged the urgent need for France to finalise a budget.
(Reporting by Dominique Vidalon, Michel Rose, Sudip Kar-Gupta and Geert De Clercq; Editing by Toby Chopra and Philippa Fletcher)