France's plan to curb the deficit: cut civil servants, eliminate public holidays, and freeze social benefits

BarcelonaFrench Prime Minister François Bayrou presented a four-year plan on Tuesday to clean up public finances, based primarily on cutting public spending across the board, with the sole exception of defense. Among the most notable measures are the elimination of 3,000 civil service jobs, a freeze on social benefits next year, and the elimination of two national holidays.

In a speech lasting more than an hour, at a lectern bearing the slogan "The Hour of Truth," Bayrou sought to convey the seriousness of the moment and even compared the current situation in France with that of Greece in 2010, when it had to be rescued"We must never forget the example of Greece," the French prime minister recommended.

"We have become accustomed to deficits. Our country has not presented a balanced budget for more than fifty years," he lamented. Bayrou announced that the goal is to save €43.8 billion in next year's budget. France recorded a deficit of 5.8% of GDP last year, the highest in the eurozone, and far from the 3% limit set by Brussels. With this plan, the goal is to reduce it to 4.6% in 2026 and reach 2.8% in 2029.

The prime minister referred to the "curse" of over-indebtedness: "If you have a deficit every month, if you are forced to ask for expenditures and you are not forced to ask for loans, but your monthly payment increases, month after month, you are drowning."

2026, a "white year"

He has said that 2026 will be a "white year," meaning that not a single euro more will be spent than in 2025, except for defense spending and public debt, which currently represents 114 percent of GDP. The government and the Bank of France have long warned that debt interest amounts to €62 billion (compared to €30 billion in 2020) and could reach €100 billion by 2029 if the deficit is not corrected. Bayrou emphasized this on Tuesday, saying that this would mean the debt burden becoming the largest item in France's public budget. "Every second, France's debt increases by €5,000," he stressed.

The head of government has specified that they will not replace one in three civil servants who retire and that 3,000 public sector jobs will be eliminated starting in 2026. "Everyone will have to participate in the effort," he warned.

He also pointed to a reduction in health spending: "We must regain control of our health spending. If we do nothing, health spending will increase by 10 billion euros next year and by 40 billion in four years." "There are changes in individual behavior that can help balance Social Security without degrading its quality," said Bayrou, who gave as an example the excessive use of diagnostic tests such as X-rays and scans. "We must be aware that the idea of 'it's free, I have the right' is deadly," declared the minister in charge, Catherine Vautrin.

In addition to the plan to reduce public debt, Bayrou has argued that France's production must also be increased. Among the measures to achieve this, he announced the reduction of two national holidays and proposed Easter Monday and May 8, which celebrates the end of World War II. The prime minister has argued that Easter Monday "has no religious significance" and that the other day chosen will help increase production "in a month of May that has become a real Gruyère cheese."

French media had speculated about a possible tax increase, but Bayrou has said that the government has no plans to finance debt reduction by raising or creating taxes.

Increased military spending

Bayrou presented his austerity plan just two days after French President Emmanuel Macron announced an additional increase in defense spending of €6.5 billion over the next two years. "To be free, we must be feared," he argued, adding that France must set an example for its European partners. "Never since 1945 has the freedom of our continent been so threatened or so dependent on our own decisions."

If this defense increase is ultimately approved by the National Assembly, defense spending will have doubled in ten years: from €32 billion in 2017, when Macron took office, to €64 billion in 2027, the GDP of 2027. And the goal is to reach 67,400 by 2030.

Macron tasked François Bayrou's government with finding a way to make this effort without having to resort to new debt. "Our military independence is inseparable from our financial independence," he said in a speech Sunday evening from the Ministry of Defense.

Political negotiations

Negotiations will now begin, as Bayrou's liberal government lacks a majority in the National Assembly. The announcement before the holidays gives him time, as budget debates won't begin until the end of October. In this way, Bayrou is trying to avoid the same fate as his predecessor, Michel Barnier, who was appointed last September: he had to draft a budget in haste and it failed to materialize. In early December, The lower house approved a motion of censure against the prime minister and his government with the votes of the left-wing bloc parties and those of the far-right National Regroupment.

At the time, Barnier proposed savings of 60 billion euros In one year, primarily through tax increases on the wealthy and large corporations and spending cuts, especially in education and healthcare. But with the vote of no confidence and the fall of the executive branch, all of this was effectively wiped out. Now Bayrou has time to try to pull strings to prevent the same thing from happening to him, but it seems clear that he will have to make concessions to secure external support, from Marine Le Pen's far right and perhaps also from the Socialists.

For the moment, Le Pen has already expressed her dissatisfaction with the government's plan, which she believes "prefers to attack the French people, workers, and retirees, rather than address waste" through savings in areas such as immigration and contributions to the European Union. "If François Bayrou does not revise his plan, we will censure him," she warned. The leader of the left-wing France Insoumise party, Jean-Luc Mélenchon, has made it clear that he will support a vote of no confidence against the government: "Bayrou is taking Macronist politics to the extreme: destroying the state and public services to make way for the market [...]. Bayrou must be removed."