Published by Global Banking & Finance Review®
Posted on February 3, 2025
2 min readLast updated: January 26, 2026
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The French 2025 budget aims to reduce the public deficit to 5.4% with 50 billion euros in savings through spending cuts and tax hikes.
PARIS (Reuters) - French Prime Minister Francois Bayrou will use constitutional powers on Monday to pass the much-delayed 2025 budget, which is likely to trigger a vote of confidence later this week.
The following are the main targets and measures in the bill.
MACRO TARGETS
- The budget bill aims to reduce the public deficit to 5.4% of economic output this year from an estimated 6% in 2024, raising the target from 5.0% under the previous government.
It foresees overall budget savings of around 50 billion euros ($51.2 billion) made up of 30 billion in spending cuts and 20 billion in tax increases.
The budget is based on a 2025 growth forecast of 0.9%.
TAXES
- Companies with annual revenue over 1 billion euros will be subject to an exceptional levy this year on top of usual corporate tax, which is expected to raise 8 billion euros.
- People with income of over 250,000 euros per year will also have to pay an additional temporary tax that is supposed to bring in an extra 2 billion euros.
The government aims to replace the tax with a new mechanism over the course of the year designed to discourage tax avoidance.
- France's financial transaction tax will be raised to 0.4% from 0.3% previously and a new tax on share buybacks will be created.
- Tax on economy-class airplane tickets within Europe will be raised to 7.3 euros from 2.63 euros currently.
SPENDING
- The bill aims to decrease overall state spending by 2%, which would be the first time in 25 years that a government has reduced spending in nominal terms.
- Spending cuts will nonetheless be less severe than those foreseen under the previous government as concessions have been made to win over Socialist lawmakers.
In particular, 4,000 teachers jobs will not be axed as previously planned, even though there are fewer school children each year. However, they will be paid for by drawing on funds elsewhere in the education budget.
The sports ministry and the organic food agency will be spared planned budget cuts.
($1 = 0.9759 euros)
(Reporting by Leigh Thomas; Editing by Christina Fincher)
The budget bill aims to reduce the public deficit to 5.4% of economic output in 2025, up from an estimated 6% in 2024.
The budget foresees overall savings of around 50 billion euros, consisting of 30 billion in spending cuts and 20 billion in tax increases.
Individuals with an income over 250,000 euros per year will face an additional temporary tax expected to generate an extra 2 billion euros.
Companies with annual revenue over 1 billion euros will be subject to an exceptional levy this year, projected to raise 8 billion euros.
The bill aims to decrease overall state spending by 2%, marking the first time in 25 years that a government has reduced spending in nominal terms.
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