Prime Minister Michel Barnier indicated on Sunday that he is open to raising taxes on France’s wealthiest individuals and large corporations to address significant public finance shortfalls, while ensuring that lower and middle classes remain protected.
This announcement comes as President Emmanuel Macron’s office revealed a new right-leaning government aimed at breaking the political deadlock following a summer snap election. One of the government’s immediate challenges will be to formulate a budget for 2025 amid a growing budget deficit.
“I won’t increase taxes on all French people, especially not the modest, working individuals, or the middle classes. However, I can’t exclude the wealthiest from contributing to our national efforts to rectify the situation,” Barnier stated in an interview with France 2 television.
France’s total debt has reached 110% of GDP, amounting to nearly €3.2 trillion. Weaker-than-expected tax revenues combined with increased spending by local governments have caused the public sector budget deficit to spiral toward 6.2% of economic output next year if unaddressed. This situation puts France in violation of European Union deficit rules, and credit rating agencies are closely monitoring the country’s financial decisions.
“A significant portion of our debt is held in international and foreign markets. We must preserve France’s credibility,” Prime Minister Michel Barnier stated.
Barnier, who previously served as the EU’s chief negotiator during Brexit, also expressed openness to revising President Macron’s pension reform. However, he emphasized that any changes should not compromise the pension system’s fragile finances. He highlighted the need to better account for the challenges faced by working mothers throughout their careers and expressed willingness to consider feedback from both employers and unions.
Macron’s political opponents on the left and far right have already threatened votes of no confidence against Prime Minister Michel Barnier’s government, arguing it does not reflect the results of the July elections. Jordan Bardella, chairman of Marine Le Pen’s National Rally party, criticized the government, stating, “This is more Macron. It’s a government that has no future.”
Barnier’s administration lacks a parliamentary majority, making it essential to maintain support from the far-right to avoid potential collapse. In light of this challenge, Barnier emphasized a tougher stance on immigration, stating, “We need a European response. We also need to take action at home. We must address the immigration issue much more rigorously.”
