French taxi protests test PM's budget-cutting resolve

By Leigh Thomas

PARIS (Reuters) -French taxi drivers are protesting regularly over proposed government cuts to cash for ferrying patients to and from medical appointments, highlighting the challenge Prime Minister Francois Bayrou faces as he seeks to slash next year's budget.

Bayrou is hoping to push through a 40 billion euro ($45 billion) budget squeeze in 2026, positioning the collective belt-tightening as an act of civic duty to correct the country's gaping deficit.

After pensions, health spending is the single biggest drain on the budget. As part of efforts to rein it in, the government hopes to make 150 million euros in savings on the 6 billion euros it shells out annually to private taxi and ambulance firms ferrying patients back and forth.

Cabbies from across France, many of whom rely on the state fares for a sizeable chunk of their income, have descended on Paris since mid-May for angry protests that have led to dozens of arrests.

Some out-of-town drivers have slept in their cars while others have tried to block access to Paris' airports and have threatened to do the same to the French Open tennis tournament taking place on the outskirts of the capital.

Sandra Vialatte, who heads a taxi firm in the Loiret region south of Paris, said the government was not listening to the industry's proposals to lower costs.

"We understand that savings need to be made, we have solutions to save money, we try to propose them but they close the door to discussions," she said during a protest last week.

France has a long history of flouting EU overspending rules and currently is running the biggest public sector deficit in the euro zone at an estimated 5.4% of economic output this year.

The government's planned 40 billion euros in budget savings is necessary if France is to have any hope of meeting its deficit target next year of 4.6%, which it says is a vital first step towards reaching an EU ceiling of 3% by 2029.

France's budget woes are undermining its efforts to ramp up defence spending to counter potential Russian aggression, and are also drawing unwelcome scrutiny from ratings agencies. Meanwhile, U.S. President Donald Trump's tariff threats threaten the country's economic growth.

The independent public audit office warned on Monday that the social welfare and health systems' finances were "out of control" in part due to the soaring costs of services like medical transport.

Bayrou, a long-term debt hawk, has promised to deliver a blueprint in early July to share the pain broadly as he tries to hammer home the idea that France will never get a grip on its public spending without a collective effort - and sacrifices.

"All French people will have to make an effort," Bayrou said on BFM TV on Tuesday, adding that he wouldn't "target any category of French people at the expense of another."

The hard left and far right alike say Bayrou is doing just that, however, by singling out the taxi drivers.

Centrist lawmaker Pieyre-Alexandre Anglade said the government had to hold the line, though, if it is to have any chance of meeting the 40 billion euro savings target.

"Things got a little bit out of control with the taxis in recent years, and now the tap needs to be turned off," he told Reuters. "The government needs to stand its ground."

($1 = 0.8825 euros)

(Reporting by Leigh Thomas; additional reporting by Gonzalo Fuentes, Lucien Libert and Elizabeth Pineau; Editing by Hugh Lawson)