France at Debt's Edge: Bayrou's Balancing Act

French Prime Minister Francois Bayrou, tasked by President Macron, is addressing France's looming debt crisis with a 40 billion-euro budget cut. Faced with a fractured parliament, Bayrou warns of sacrifices necessary to avoid a Greek-like crisis while safeguarding defense spending amid political opposition.

France is on the brink of a debt crisis, warned Prime Minister Francois Bayrou as he unveiled plans for a 40 billion-euro budget squeeze. Facing political pressure and a fractured parliament, Bayrou aims to steer the nation away from financial brinkmanship.

With President Macron delegating financial reforms, Bayrou emphasized the need for austerity measures to tackle public overspending and avert a situation akin to Greece's past debt woes. Despite plans to increase defense spending, other sectors face potential cuts, highlighting the tensions between fiscal responsibility and political viability.

The budget reductions may freeze social benefits, and tax breaks could be capped, fueling resistance from opposition parties. If unsuccessful, Bayrou risks a no-confidence vote, which could further destabilize France's economy by impacting credit ratings and hindering future fiscal planning efforts.

(With inputs from agencies.)