Ratings agency Fitch cut France’s credit rating on Friday, just days after former Prime Minister François Bayrou’s minority government collapsed over his push to slash next year’s budget by nearly €44 billion to rein in a ballooning budget deficit.
While the Socialists have not ruled out working with Lecornu entirely, they are entering negotiations with demands that are hard for both Macron’s camp and Les Républicains to swallow — including a minimum 2 percent tax on those worth more than €100 million that was inspired and popularized by French economist Gabriel Zucman.
Higher taxes on France’s most wealthy citizens are one of several demands being made by those going on strike. In their initial announcement on Aug. 29, before Lecornu took the reins from Bayrou, unions demanded that the government invest in France’s social safety net, green transition and reindustrialization effort. They also voiced opposition to Bayrou’s proposed budget squeeze.
Former President François Hollande, now a lawmaker who often finds himself at odds with the Socialists’ left flank, could prove to be an important interlocutor, someone close to Lecornu, who was granted anonymity to speak candidly, told POLITICO. Hollande, while ruling out any direct involvement in the new government, has expressed skepticism about his party’s current tax plans and openness to settling for less ambitious tax hikes.
“Everything must be done to avoid a new government collapse,” said Carole Delga, one of Hollande’s former Cabinet members and a prominent figure of the Socialists’ moderate flank. “There need to be negotiations on the next budget for the sake of the French people — to reassure the public by bringing stability, and to avoid alarming financial markets.”
Others on the French left hope that Thursday’s popular discontent will either force Lecornu to concede to some of their demands, like higher taxes on the wealthy and fewer spending cuts, or precipitate his government’s demise.
Elisa Bertholomey contributed to this report.