France is confronting a deepening financial and political crisis, with its government on the verge of collapse for the second time in nine months. Prime Minister François Bayrou is set to face a confidence vote in Parliament over his proposed $51 billion austerity plan aimed at addressing the country’s ballooning debt and deficit. If the motion fails, Bayrou will be forced to resign, compelling President Emmanuel Macron to appoint a new prime minister who must immediately resume efforts to stabilize the national budget.
Despite having the second-largest economy in Europe after Germany, France’s fiscal health has deteriorated due to excessive public spending and declining tax revenues. The European Commission previously reprimanded the country for breaching EU fiscal rules, prompting the government to pursue welfare cuts and tax hikes to rein in its finances.
Investor confidence has waned, pushing French borrowing costs to among the highest in the eurozone. The situation underscores growing concerns about the sustainability of public debt and the government’s ability to implement effective reforms amid political instability.
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Why France’s Financial Woes Are Pushing Its Government to the Brink
Italy was once Europe’s emblem for political instability, with a mounting debt and deficit and few options to fix the mess. Now, it’s France’s turn, and the situation is about to get worse. n nOn Monday, President Emmanuel Macron’s government is expected to fall for the second time in just nine months after a confidence vote in Parliament. n nThe French prime minister, François Bayrou, called a vote to shore up support for his plan to mend the country’s finances with 44 billion euros (a little over $51 billion) in spending cuts. If the vote goes against him, Mr. Bayrou will be forced to resign and Mr. Macron will have to name yet another prime minister, who will have to immediately return to the task of fixing France’s budget. n nIn the meantime, investors have pushed up French borrowing costs to among the highest in the eurozone, reflecting rising risk. n nHow did France get this point? n nThe country’s economy, the second largest in Europe after Germany’s, appears strong at first glance. Before President Trump’s tariff war, growth was slow but steady and employment was picking up. n nBehind the scenes, outsize government spending and falling tax receipts strained finances. The European Commission, the European Union’s executive branch, reprimanded France last year, and Mr. Macron’s government raced to fix a surging debt and deficit with cuts to the welfare state and tax increases. n nThank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times. n nThank you for your patience while we verify access. n nAlready a subscriber? Log in. n nWant all of The Times? Subscribe.