France's Premier Faces Budget Challenges Amid Fitch Downgrade

Newly appointed French Prime Minister Sebastien Lecornu, responding to a credit downgrade by Fitch, has dropped the proposal to eliminate two public holidays in a bid to reduce the national deficit. Lecornu now faces the challenge of forming a cabinet and drafting a sustainable 2026 budget amidst political instability.

In a decisive move, France's new Prime Minister, Sebastien Lecornu, announced on Saturday that he would abandon a proposal to cut two public holidays. This decision, initially suggested by his predecessor, was intended to address budget concerns and reduce the national deficit.

This announcement comes in the wake of Fitch's recent downgrade of France's sovereign credit rating to A+, marking a record low for the country. In an interview with French daily La Provence, Lecornu stated, 'We are paying for the instability,' highlighting the pressure on his administration to stabilize France's economic standing.

Lecornu's early tenure is marked by urgency as he forms a new cabinet and drafts a 2026 budget that could pass through a highly divided parliament. The Fitch downgrade adds complexity to these tasks, emphasizing the need for effective fiscal strategies in the face of political obstacles.

(With inputs from agencies.)