Analysis – Macron has a new prime minister, but the same old problems Reuters writes

Author: Michel Rose

PARIS (Reuters) – When veteran centrist François Bayrou, France’s new prime minister, was education minister in the 1990s, his plan to increase subsidies for private schools led to nationwide protests. He quickly relented and would remain in that position for another four years.

Three decades later, he will face a different force in the form of a fractured and fractured parliament where one of his earliest tasks – as President Emmanuel Macron’s fourth prime minister of the year – will be to pass the 2025 budget.

First, he must appoint a government that, like that of his predecessor Michel Barnier, will have the support of a minority in parliament and be vulnerable to attacks from far-right and left-wing opponents.

The ouster of Barnier and his cabinet – the first time the French parliament has voted to remove a government since 1962 – appeared to have stunned even those behind the move. For now, there is cross-party support for emergency legislation to ensure government funding doesn’t stop – but then the hard work on next year’s budget will begin.

“The difficulties remain the same as under Michel Barnier,” Arno Benedetti, a professor at Sorbonne University, told Reuters. “At least, a motion of no confidence does not seem likely in the very short term.”

Macron’s aide said that Bayrou is “the most consensual candidate who can bring people together.” Socialists said he represented more of the same.

A career politician, Bayrou, 73, was a champion of centrism until Macron reshaped the political landscape in 2017, dynamiting traditional mainstream parties in the campaign Bayrou rallied behind.

Bajru has been vocal in the past about the risks posed by France’s growing debt pile.

He reiterated that on Friday, saying the country’s debt was a “moral problem” as much as a financial one. “I hear your warning about the seriousness of the situation and I agree,” he told Barnier.

But he placed great value on keeping the peace, whether with unions, legislators, or the myriad powerful interests in France.

However, maintaining peace in a National Assembly dominated by three warring factions will be nearly impossible.

MPs’ rejection of the 2025 budget bill led to Barnier’s downfall, and left-wing leaders say they could try to oust Bayroux if he also uses special constitutional powers to pass the budget without a parliamentary vote.

“Incorporating the demands of opposition parties may be fiscally costly and therefore the degree of fiscal consolidation may be limited next year,” JP Morgan’s Raphael Brun-Aguerre said in a note.

THE RED LINES OF THE FAR RIGHT’S BUDGET CONTINUE

During the week, Macron held talks with party leaders from the center-right Republicans to the Communists.

He appealed to all “republican forces” to unite, but decided to resist calls from the Socialist Party to appoint a prime minister from among its own ranks, unwilling to risk unwinding reforms that have liberalized the eurozone’s second-largest economy and put the pension system on a financially sounder footing. .

Even so, the president’s 2023 pension reform will remain in the crosshairs of his opponents.

“Our red lines remain,” Jordan Bardella, leader of the far-right National Assembly, told reporters shortly after Bayrou was appointed. Those red lines include indexation of pensions to inflation during 2025.

One opinion poll this week found that 35%-38% of voters intend to back Bardella boss Marine Le Pen in the next presidential election in 2027 – a level not seen before for a far-right leader and putting her in the lead.

Moreover, even if Bajru’s political opponents do not stand in the way, the challenges for his future government will be enormous.

He will need to reduce the budget deficit from a projected 6.1% in 2024 while keeping protest-prone unions at bay, increasing military spending for Ukraine and finding ways to support an ailing industrial sector.

Barnier has promised to reduce the deficit by raising taxes on the rich and big companies, as well as reining in planned increases in pension payments. But these measures failed when his government was overthrown.

Former finance minister Bruno Le Maire, who was riled by lawmakers investigating his role in France’s failure to rein in its deficit, launched a scathing indictment of parliament.

“This assembly taxes, spends, censors,” he said. “She has long since lost all sense of economic and budgetary reality.”