Published by Global Banking & Finance Review®
Posted on January 14, 2025
3 min readLast updated: January 27, 2026
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French PM Francois Bayrou will outline pension reform concessions to gain support for the 2025 budget amid political instability.
By Elizabeth Pineau and Michel Rose
PARIS (Reuters) - French Prime Minister Francois Bayrou is expected to lay out in a speech on Tuesday the contours of a deal to water down pension reforms in return for support from the left on passing a budget.
The speech comes after a tumultuous 2024 for France when President Emmanuel Macron shocked the nation by calling early elections, only to lose his working majority in parliament just as the public finances went off track.
Bayrou's government, which was formed last month after the collapse of his predecessor's administration, is trying to win assurances from some opposition parties and the Socialists in particular that they will not vote against its 2025 budget.
The Socialists, who voted down the previous budget proposals in December in conjunction with far-right lawmakers and precipitated the fall of Michel Barnier's government, have made concessions on the 2023 pension reform a condition for support.
It was still unclear before the speech whether a deal had been reached, but talks at the finance ministry last week between Finance Minister Eric Lombard and left-wing leaders appeared to have made progress.
Bayrou's entourage declined to reveal details of the speech in which he will set out to parliament the government's direction, but told Reuters the content would take into account his talks with party leaders and unions.
However, the fragmented, hung parliament delivered by voters in June's early elections remains, and there is no certainty Bayrou will be able to please enough of the unruly lawmakers to survive longer than his predecessor.
Having decided to make concessions to the left to avoid being at the mercy of Marine Le Pen's far-right, he may anger conservative and centrist lawmakers who fear the cost of any pensions compromise.
"Francois Bayrou musn't lose on his right what he gained on his left," William Thay, head of French political think-tank Le Millenaire told Reuters.
"Suspending the pension reform risks tensing up his base, in particular the Macronistas," he said.
Undoing parts of the pension reform, which raised the minimum age to draw a full pension to 64 from 62 to save 17 billion euros a year, could spook investors, who have already shown signs of nervousness over France's large budget deficit.
Macron, who offered a mea culpa in his New Year address over the political instability created by his surprise decision to call snap elections, has warned the French needed to work more, not less. However, he no longer is the ultimate decision-maker.
(Writing by Michel Rose; additional reporting by Sybille De La Hamaide; Editing by Toby Chopra)
The main topic is French PM Francois Bayrou's speech on pension reform concessions to secure support for the 2025 budget.
The speech is significant as it addresses political instability and aims to balance support from left and right parties.
Potential risks include investor concerns over budget deficits and political backlash from conservative and centrist lawmakers.
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