French Government Leverages Constitutional Powers to Propel Controversial 2025 Budget

French Prime Minister Francois Bayrou is set to invoke constitutional powers to pass the delayed 2025 budget on Monday, potentially leading to a vote of confidence. The budget seeks to reduce the public deficit, impose new taxes on high earners and companies, and achieve modest economic growth in 2025.

French Prime Minister Francois Bayrou plans to employ constitutional powers on Monday to push through the long-debated 2025 budget, a move likely to spur a confidence vote later this week. The budget targets a reduction of the public deficit to 5.4% of economic output, up from last year's estimates.

Significant savings are anticipated, totaling around 50 billion euros—comprised of 30 billion in spending cuts and 20 billion in tax hikes. Companies earning over 1 billion euros annually will face exceptional levies, along with additional temporary taxes for high-income individuals, designed to curtail tax avoidance.

Financial adjustments include an increase in France's financial transaction tax and the creation of a new levy on share buybacks. Despite spending cuts, sections like the sports ministry and the organic food agency will avoid the ax, while the education sector's job reductions are reevaluated.

(With inputs from agencies.)