Though France’s credit rating has not been downgraded this year, the yield on the country’s 10-year bond has crept well over 3 percent in 2025 and in recent days has been higher than that of Cyprus, Portugal and Spain — meaning financial markets view Europe’s second-biggest economy as a risker investment than those other countries.
Bayrou has promised to bring France’s budget deficit down from 5.8 percent of gross domestic product in 2024 to 5.4 percent this year as part of the government’s plan to ratchet the figure down to 3 percent of GDP, as required by European Union rules, by 2029.
Economy and Finance Minister Eric Lombard and Budget Minister Amélie de Montchalin have already sent proposals to Bayrou, which include several options to achieve the €40 billion in savings. The duo has proposed to reduce the scope of some existing tax breaks and to freeze the value of certain benefits paid out by the government that are typically adjusted for inflation.
But without a majority in the National Assembly, Bayrou will likely be forced to pass his spending plans using a constitutional back door that allows him to pass legislation without a vote but, in turn, gives lawmakers the power to put forward motions of no confidence.
Bayrou’s predecessor Michel Barnier was ousted last year when trying to use the tool to pass a budget of his own.
The hard-left France Unbowed, which has repeatedly tried to topple Bayrou’s government, said it will once again try to do so if it puts forward what one of its lawmakers called “an austerity policy.”
