The French government’s newly unveiled 2025 budget has drawn backlash from all sides as it pushes for €60 billion in spending cuts and tax hikes aimed at reducing the country’s “colossal” debt burden.
Announced late Thursday by Prime Minister Michel Barnier, the belt-tightening plan attempts to tackle France’s 6 percent deficit by cutting services and increasing taxes on businesses and the wealthy.
Only Greece and Italy have bigger debts in the EU.
Facing increasing pressure from the European Commission to bring the growing deficits under control, the government aims to trim it to 5 percent by the end of 2025. It's the first step towards Barnier's pledge to get the deficit below 3 percent of GDP, in line with EU rules.
Reactions have been fierce. Right-wing MPs argue the cuts don’t go far enough, while the left insists they disproportionately target the working class.
Here’s an outline of the main measures.
Tax increases
Businesses with revenue of more than €1 billion a year will be hit with a temporary tax hike lasting two years. Some 440 large corporations would be impacted, raising a total of €12bn.
The government will scrap tax breaks on low-income workers and phase out subsidies on apprenticeships – measures that France's employers' association Medef says will put "hundreds of thousands of jobs" at risk.
EDF, France’s state-owned electricity provider, will pay the state a special dividend on its nuclear energy production after it made record profits in 2023 due to soaring energy prices.
Income tax will increase for the 65,000 highest earners in France at a minimum rate of 20 percent.
According to the public accounts minister, the tax rises would largely be limited to households with a combined income of €500,000 per year, or €250,000 per year for a single person. The increases, applicable for three years only, would raise some €2bn.
The government is to end its policy of capping electricity prices that shielded households from soaring energy costs. Starting in February, an estimated 6 million households that had fixed electricity rate contracts will pay 14 percent more.
Levies will also be increased on owners of polluting vehicles and on the maritime sector.
Airlines and private jets face new levies on flights, generating around €1bn.
Meanwhile, a green tax on airline tickets would raise some €1.5bn. The tax is not part of the budget legislation, but will be passed through an amendment in agreement with the aviation industry.
France targets the rich with temporary tax hikes to bring down debt
Government spending cuts
Most of the cuts target public sector spending, with over 2,200 civil service jobs slashed – the majority in education and public accounts – though an additional 1,000 posts will be created in the judiciary and army.
The state's biggest expenditure is education and the government plans to axe 4,000 teaching posts in 2025, mainly in pre-school and elementary level.
The Education Ministry says the cuts are justified due to a drop in the number of pupils and which is expected to accelerate with France’s falling birthrate.
While the education budget overall will remain fairly stable at 63 billion euros, the justice and sports ministries are among those facing cuts.
Local authorities will see cuts to the tune of €5bn.
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Health and pensions
Retirees will see the annual inflation-adjusted increase to their state pensions delayed by six months – a controversial measure that will save about €3.6bn.
While the healthcare budget remains stable, state reimbursement for doctor’s appointments will drop from 70 percent to 60 percent, with private health insurance expected to cover the difference.
Private health insurance (mutuelle) will cover the difference, but the changes could lead to an increase in insurance premiums.
The government also plans to lower the cap on sick leave payments from 1.8 times the minimum wage to 1.4 times.
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Unpopular all round
Barnier now has the huge task of getting his budget through a deeply fragmented National Assembly, where his coalition government of centrists and conservative rightwingers does not hold a majority.
So far, it has been fired on from all sides.
Members of President Macron's Renaissance group are unhappy with tax increases which have always been a redline since Macron launched his pro-business agenda in 2017.
Barnier’s own conservative Republicans are pushing for deeper spending cuts, while left-wing MPs have blasted the austerity measures, particularly those affecting public services.
"We're going to take two billion euros from the richest and 40 billion from the poorest," France Unbowed MP Eric Coquerel told TF1.
Local authorities have also expressed outrage. The head of France urbaine, an association representing large cities, described the €5bn cuts as "unacceptable" and a threat to local services.
If opposition parties cannot be brought on board, the government may resort to a constitutional tool allowing it to bypass parliament altogether.
That carries the risk that the hard-left France Unbowed and far-right National Rally could band together to topple the fragile government through a no-confidence motion.
