Bayrou’s Budget Shake‑Up: Two Holidays Axed, Broad Cuts to Balance the Books
In a candid address on July 15, 2025, France’s Prime Minister François Bayrou laid out his ambitious vision for the 2026 budget—a €43.8 billion austerity plan to combat a ballooning deficit of 5.8% of GDP. At its core: scrapping two public holidays (most likely Easter Monday and May 8, Victory Day), a move intended to boost annual productivity and revenues by around €4 billion .
🧩 Comprehensive Measures to Restore Balance:
- Productivity Push: Reduce holidays and incentivize work with a unified social welfare payment .
- Fiscal Discipline: Enforce freezes in public and social spending (excluding defense), including civil servant salaries and pension indexing .
- Healthcare & Administration: Cap healthcare growth, raise co-payments, and streamline public agencies—closing or merging several .
- Public Service Reductions: Plans to cut thousands of jobs in the civil service, replacing just one in three retirees .
- Enhanced Defense Spending: Allocate an additional €6.5 billion (+10%) to bolster military readiness amid Russian pressures .
- Fiscal Reform and Taxes: Introduce a wealth solidarity surcharge, parcel tax, and eliminate tax breaks to expand the tax base.
🧭 A Tightrope Ahead:
Bayrou faces significant resistance: far-right, socialist, and far-left factions have condemned the plan as unjust, and union leaders are mobilizing mass protests . Given his minority status, Bayrou could resort to executive powers, but Parliament could respond with a no-confidence vote once the formal budget is tabled this autumn .
📌 Why It Matters:
- France must rein in €3.3 trillion in debt and reduce deficit levels or face financial instability and credit ratings downgrades .
- Without decisive action, interest payments alone may exceed €100 billion annually by 2029—posing a grave risk to fiscal health .
- The plan’s success hinges on its political fate—a potential turning point for President Macron’s leadership and France’s economic trajectory.
