The new team at the helm of France’s economy will need to begin work immediately on passing a 2025 budget, which has been in limbo since the National Assembly rejected the belt-tightening proposal from former Prime Minister Michel Barnier, which led to the toppling of his government.
New Prime Minister Francois Bayrou’s team, which he unveiled Monday, is under pressure to pass a budget to cut soaring public spending and reduce a deficit expected to end the year at above six percent of gross domestic product.
Bayrou appointed Eric Lombard to lead the charge, as Economy minister. He has extensive experience in the public and private financial institutions.
The head of Caisse des Depots, the investment arm of the French government, he has had a career as a banker. But he may be vulnerable to accusations that he leans too far left politically, and that he is too close to the deeply unpopular Macron.
He will work with Budget Minister Amélie de Montchalin, a long-time Macron supporter who was elected to parliament in 2017, along with four other ministers.
They will prepare a draft budget that will be presented to the National Assembly when it comes out of its recess on 13 January.
While the National Assembly passed a special law to avoid a government shutdown on 1 January, it is only a temporary measure and does not provide long-term funding, and leaves aside promises for farmers, and New Caledonia, among others.
A budget also sets income and corporate tax rates for the year, and addresses a public deficit that France has promised its European partners it would reign in.
The Moody’s rating agency has already downgraded France’s sovereign credit rating, and that of seven of the country’s largest bank, which adds to the debt burden.
