Latest news with #François Bayrou
The Guardian
2 days ago
- Business
- The Guardian
Two days less holiday? France is up in arms but my sympathy is limited
France is skint, but the French are in denial. To judge by the howls of outrage from the left and the hard right of the French political spectrum, you would think the prime minister, François Bayrou, had just taken a Javier Milei-style chainsaw to public services, announced Doge-style mass layoffs or imposed swingeing pay cuts. But it was Bayrou's suggestion that the French should give up two of their 11 cherished public holidays – Easter Monday and 8 May, the anniversary of the end of the second world war in Europe – and work instead to increase economic output and hence government revenue that provoked the anger. Jean-Luc Mélenchon, the leader of the hard-left France Unbowed (LFI) party, accused the centrist prime minister of leading a 'race towards an economic, financial and social abyss for the greater suffering of all'. The Socialist party leader, Olivier Faure, described the proposals as 'a demolition plan for our French model', and Jordan Bardella, president of the hard-right National Rally (RN), said the the proposal to cancel the two holidays was 'a direct attack on our history'. The hard left and the populist right threatened to bring down the government with no confidence motions in the autumn, when the budget will be put to a hung parliament, as they did with Bayrou's short-lived predecessor, Michel Barnier, last year. As is so often the case, the sound and fury in the echo chamber of French political rhetoric is out of all proportion to reality. Bayrou proposes a standstill in public sector pay, pensions, welfare benefits and tax thresholds in 2026, which, with inflation forecast to increase slightly to about 1.4% next year, means a modest erosion of living standards for most people and a slightly increased tax take. Better-off pensioners will pay more tax, poorer ones will pay less. The measures are supposed to reduce the deficit by €43.8bn to 4.6% of economic output next year. Only defence spending will be increased, in line with France's commitment to Nato, given Europe's deteriorating security situation. This is hardly a draconian austerity purge for a country that had a deficit of 5.8% of GDP last year – the highest in the euro area – and which by most rational measurements is living beyond its means. National debt has risen to 113% of GDP, higher than any EU country except Greece and Italy. But while their debt piles are falling, France's keeps on growing. Public spending accounts for 56.5% of GDP in France, the second highest level in the EU after Finland. Despite the centrist president Emmanuel Macron's intention to reduce the tax burden and get more French people into work when he took office in 2017, a series of crises – the revolt of the gilets jaunes against a carbon tax, the Covid-19 pandemic and the effects of Russia's war in Ukraine – triggered more state expenditure. In 2023, France's tax-to-GDP ratio was 43.8%, significantly higher than the average of 33.9% in advanced economies. The country has too many layers of public administration, which together employ 5.8 million people – 20% of the total workforce. Bayrou proposed that one in three retiring civil servants should not be replaced, drawing immediate protests from trade unions representing teachers, health workers and the police. Perhaps the most telling criticism came from Édouard Philippe, Macron's first prime minister and a likely centrist presidential candidate, who said Bayrou's package contained no structural reforms of failing public policies and was just an emergency plan to limit the damage without solving the problem. Sign up to This is Europe The most pressing stories and debates for Europeans – from identity to economics to the environment after newsletter promotion Axing a couple of public holidays would go some way towards narrowing the gap between the number of hours worked per inhabitant in France compared with competitors such as Germany, Italy, Spain and the UK – not to mention the United States or South Korea. But the French are militantly resistant to any attempt to remove acquired social rights, regardless of the economic situation, changing demography or dire public finances, as they showed with sustained social unrest over Macron's raising of the retirement age to 64. It's not that French workers actually work much less than their European counterparts. But France has less of its population in employment because of a combination of earlier retirement, later entry into the labour market, higher unemployment and welfare dependency. 'The markets and the EU are watching us,' Pierre Moscovici, the president of the French court of accounts and a former finance minister and European commissioner, said after presenting an annual report that warned that the country's debt was approaching a tipping point. 'As demanding and difficult as it may be, getting our public finances under control from 2026 is imperative for debt sustainability,' he added. France has long enjoyed the indulgence of bond market vigilantes because of its ability to raise revenue and a presumption that its debt was implicitly backed by Germany, since a French financial crisis would trigger severe turbulence in the eurozone. But several credit ratings agencies have recently lowered France's sovereign rating because of a concern that the government will be unable to enact serious deficit-cutting measures without a parliamentary majority. French people need to get real about their fiscal predicament before it descends into an acute crisis. So far there is little sign of that reality dawning on either the political class or the population. The left just keeps repeating that the government should soak the rich and reimpose a wealth tax, even though that would make little more than a symbolic dent in the deficit. The populist right argues that the state could save all the money it needs if only it stopped paying benefits to immigrants. Those numbers don't add up either. With so many politicians encouraging voters to go on believing that 'public money' grows on trees or can be borrowed in unlimited amounts – Mélenchon has argued in the past that France should default on its debt – it is hard to have a rational debate on the budget. The stage is set for another battle of wills in parliament, and probably in the street. If the uneasy grouping of centrist and conservative parties supporting Bayrou cannot get something resembling his proposed savings through the National Assembly this autumn, France may be plunged into a real financial crisis that could play into the hands of Marine Le Pen's National Rally ahead of the next presidential election, due in 2027. Paul Taylor is a senior visiting fellow at the European Policy Centre
Bloomberg
4 days ago
- Business
- Bloomberg
Bayrou's Crisis Budget Plan Lacks a Crisis to Get Public Onboard
Bonjour et bienvenue to the Paris Edition. I'm Paris Bureau Chief Alan Katz. If you haven't yet, subscribe now to the Paris Edition newsletter. Prime Minister François Bayrou said during his budget presentatio n this week that this was France's last chance to rein in government spending and attack its yawning deficit before hurtling over the proverbial cliff.
Washington Post
6 days ago
- Politics
- Washington Post
France's premier wants to ax two holidays to boost growth. Non, people say.
PARIS — The French government proposed cutting two public holidays per year to boost economic growth as part of a budget plan that it billed as a 'moment of truth' to avoid a financial crisis. But in a country where vacations are sacred, the idea — unsurprisingly — prompted outrage across political spectrums, suggesting it may have little chance of becoming law. The populist National Rally launched a petition against French Prime Minister François Bayrou's plan to eliminate two of the country's 11 national holidays, calling it a 'real provocation' against French workers. The party, which has the largest number of lawmakers in the 577-person National Assembly, vowed to block the budget when it comes up for a vote this fall. Marine Tondelier, a politician from the Greens party, whose bloc holds 38 seats in the National Assembly, called the suggested holiday cuts a 'red herring' designed to distract the French public from 'all the other concessions' the government proposed on public spending, taxes and public services to help with the country's growing debt and low growth. Jean-Luc Mélenchon, the far-left leader whose bloc holds 71 seats, called on all left-wing parties to vote to censure the government over the proposal. The reaction from the left and right is set to put Bayrou on a 'collision course' with lawmakers when they return to work in the fall, said Mujtaba Rahman, managing director for Europe at the Eurasia Group. Bayrou named Easter Monday, usually in April, and May 8, which commemorates the defeat of Nazi Germany, as options but said he was open to considering others in future negotiations over the budget, including with unions and other workers groups. He said that the change could add 'several billion' euros to the state budget, 'simply because businesses, shops, the civil service, and the nation will work, and our production will improve.' Rahman said the budget proposal, as it stands, has little chance of getting through a divided assembly. After snap elections last year produced a hung parliament, President Emmanuel Macron's centrist government does not have enough seats in the National Assembly to pass laws on its own and needs the support of other parties. 'Most of the measures he's put forward are incredibly contentious, and the reaction of both the far right and the hard left to these proposals was very clear,' Rahman said of Bayrou. Rahman called Bayrou's budget proposal 'a suicide note that will allow him to claim that he told the country and parliamentarians what France needs to do to get its fiscal house in order, in the knowledge that these measures won't go through.' Bayrou unveiled the sweeping budget proposal at a news conference Tuesday, sketching an outline of various measures he said are designed to halt the 'spiraling public debt' by 2029. The top line: 43.8 billion euros in proposed tax increases and public spending cuts aimed at bringing down the deficit to 4.6 percent of gross domestic product next year — an ambitious goal he said was necessary to avoid a future financial crisis. 'We have become addicted to public spending,' said Bayrou, who was named prime minister in December after several previous governments fell amid a protracted period of political upheaval, and who is staking the political future of his government on this budget. 'This is the last stop before the cliff,' he added. His other measures involve reducing public spending, including through cuts in government jobs and expenses, and a freeze on all pension and benefit increases in 2026. He also suggested that taxes could effectively increase for wealthier retirees and working households as well as large companies. But the measure that's drawn the strongest reaction so far is Bayrou's proposal to bring down the number of holidays in an effort to boost productivity. French people are particularly attached to their time off and work-life balance and tend to get ticked off when their government attempts to reduce either. Major protests have broken out in recent years over attempts to increase the retirement age — which Macron's government eventually forced through — and increase the maximum number of working hours per week. Studies show that public holidays are linked with employee well-being but that they come at a cost — although it is difficult for economists to assess what would have happened if a day had been a holiday or vice versa. Britain's Department for Digital, Culture, Media and Sport estimated that a one-off holiday created in June 2022 to mark Queen Elizabeth II's 70th year on the throne cost the British economy about 2.4 billion pounds ($3.2 billion) in terms of GDP. Research in 2021 estimated that in countries that do not replace public holidays when they fall on a weekend, an extra day off 'would forgo around 20 percent of the proportional GDP.' Other studies have shown that holidays can have positive impacts on the economy, from boosting retail sales to increasing tourism. After the Danish government decided to eliminate the Store Bededag religious holiday starting in 2024 and use the money saved to increase defense spending — prompting widespread anger there — a paper published by the International Monetary Fund estimated that the holiday's cancellation would increase labor supply by between 0.14 and 0.34 percent. Meanwhile, President Donald Trump has said that the United States has 'too many non-working holidays' and said 'it must change.' 'It is costing our Country $BILLIONS OF DOLLARS to keep all of these businesses closed. The workers don't want it either! Soon we'll end up having a holiday for every once working day of the year,' he wrote on Truth Social on Juneteenth, a day to mark the end of slavery that became a federal holiday in 2021. France has roughly the same number of public holidays as the United States (11) and Canada (12), but more than its British neighbor across the Channel (8). Charles Wyplosz, emeritus professor of international economics at the Graduate Institute in Geneva, wrote in an editorial for French newspaper Le Monde that Bayrou's budget proposal is 'courageous and original in some ways,' but warned that it could be 'only fleeting' if its key measures are watered down because of political opposition. 'It shows that it's possible to stabilize the deficit without seriously increasing taxes,' Wyplosz wrote. Critics of the proposal to cut two holidays said it represents an attack on French history. The National Rally called May 8 'a sacred date in our history,' while conservative politician Nicolas Dupont-Aignan accused the Bayrou government of 'erasing us' by cutting Easter Monday, a day 'dedicated to the most important Catholic feast in the calendar.' May 8 became a public holiday in France in 1953, after the end of World War II. But just a few years later, in 1959, President Charles de Gaulle decreed that the day would remain a commemoration but would no longer be a holiday, in an effort to promote unity between postwar Germany and the rest of Europe. In 1975, President Valéry Giscard d'Estaing eliminated even the commemoration aspect of the day for similar reasons. It was reinstated as a public holiday in 1981 under President François Mitterrand.
Telegraph
15-07-2025
- Business
- Telegraph
France to scrap VE Day holiday to fix budget black hole
France's prime minister has proposed scrapping the country's public holiday for VE Day as he tries to get a debt-strapped nation to live within its means. François Bayrou has proposed axing two of the country's 11 bank holidays as part of a €44bn (£38bn) package intended to tackle the country's fiscal crisis. 'As a nation, we must work more,' Mr Bayrou said. 'This change to our holiday calendar will bring in billions to the state budget, simply because businesses, shops, the civil service and the nation will be working and our production will be improved.' Paris has proposed scrapping Easter Monday and VE Day. Mr Bayrou said Easter Monday 'has no religious significance', while Victory in Europe Day falls in May, 'a month that has become a veritable Swiss cheese, where people jump from bridge to viaduct on vacation'. The proposal is likely to run into stiff resistance in the French parliament, where MPs are almost certain to reflect French voters' anger at losing their precious springtime days off. Jordan Bardella, leader of the populist-right National Rally (RN) party, said on the social media platform X that his party opposed the 'provocative' measure. 'The elimination of two public holidays, which are as meaningful as Easter Monday and May 8, is a direct attack on our history, our roots, and on working France,' he said. Mr Bayrou's predecessor Michel Barnier lost the premiership last December after failing to win support for a less controversial austerity package. He had rejected the idea of cancelling any public holidays, even though a Senate report had suggested it would generate €2.4bn a year. If Mr Bayrou succeeds, France will still have more public holidays than England and Wales, which have eight. Scotland has nine and Northern Ireland has 10. On the continent, Germany has nine national holidays, Italy has 12 and Spain has eight national days and up to half a dozen regional or local holidays. Mr Bayrou's announcement came the day after France's most effervescent public holiday, the July 14 Bastille Day celebration of French nationhood and values. The premier said he was open to a public debate on which holidays should go. May 8 is observed across Europe, when the continent celebrates the surrender of Nazi Germany in 1945, which ended the Second World War in the Western hemisphere. 'These are proposals. I am ready to accept or examine others. If other ideas arise, welcome,' Mr Bayrou said during a speech to politicians and journalists that outlined his suite of tax increases and spending cuts. Further budget cuts As well as axing two public holidays, Mr Bayrou plans to freeze tax thresholds and welfare benefits, cut tax loopholes for high earners, rein back social and health spending, and freeze salaries and hiring in the French civil service. He said his plans would trim the budget deficit to 4.8pc of GDP next year, down from 5.8pc now. The government hopes to ultimately cut it to 2.8pc by 2029. France's debt-to-GDP ratio is 113pc, prompting Mr Bayrou to liken France's public finances to those of Greece and Spain during the eurozone crisis of the early 2010s. He said France was in 'mortal danger' and faced 'a moment of truth'. 'It's the last stop before the cliff, before we are crushed by the debt,' he said. 'It's late, but there is still time.' France's long-term government bond yields have this week touched highs seldom seen since the eurozone crisis, as investors questioned whether Mr Bayrou and Emmanuel Macron, the French president, can get the country's finances back on track. Yields remained steady in Tuesday afternoon trading. The fiscally hawkish Mr Bayrou does not command a majority in parliament, and only rammed the 2025 budget through the National Assembly in February using special constitutional powers. The centrist PM has already survived eight no-confidence motions since taking office last December, often with the backing of either the relatively mainstream Socialist Party or Mr Bardella's RN. National Rally has signalled its opposition not only to the bank holiday measure but to Mr Bayrou's broader austerity drive, suggesting the insurgent populist party might seek yet another no-confidence vote. French politics has been in a state of near-paralysis since Mr Macron called a snap National Assembly election last July that resulted in a hung parliament. The constitution forbids the president from triggering a second election within 12 months. With that period now elapsed, there has been speculation in recent weeks that he might dissolve parliament again. Mr Macron on Sunday said parliament's opposition to his premier's budgets was hurting France economically, and holding up critical spending in areas like defence. He said defence spending, which totalled €50.5bn this year, should rise by €3.5bn next year and another €3bn in 2027.
