French PM Barnier tells parliament the country’s 'colossal' debt is 'sword of Damocles'

by · France 24

 

  • Reducing public debt

France must slash its budget deficit and trim its tottering debt pile, newly-installed Prime Minister Michel Barnier told lawmakers Tuesday, vowing a combination of higher taxes and spending cuts.

"Our aim is to reduce the deficit to five percent (of GDP) in 2025... on the right path to reach the three-percent ceiling in 2029," two years later than previously planned, Barnier said, adding that two-thirds of the cuts would come from "reducing spending" but that the government would "ask big companies making large profits to contribute to the recovery".

Paris will also "ask for an exceptional contribution from the wealthiest French people to prevent the tax avoidance strategies of the biggest taxpayers," he added.

"The sword of Damocles hanging over us is our colossal financial debt," Barnier said in a keynote speech to parliament, adding that France's deficit was making France weaker in Europe.

  • Environmental action

Barnier cited a reduction in France’s greenhouse gas emissions in 2024 as proof that France could take effective action on environmental issues.

He said that France would encourage the development of nuclear power plants and install new nuclear reactors, including EPR reactors, in a bid to improve its energy mix, as well as investigating its use of renewable energies.

"We will be resolute in our pursuit of developing nuclear energy, especially regarding new reactors and renewable energy," said Barnier.

He also called for action on a range of environmental measures including decarbonising factories and encouraging technological innovation, improving recycling and protecting biodiversity.

  • Restarting talks with unions over pensions system

Barnier said that the government was open to re-start talks with trade unions over the country's pension system, which saw opposition to changes to the system result in widespread street protests.

Barnier said that he would suggest "reasonable and fair" tweaks to the pension law.

President Emmanuel Macron passed legislation resulting in a rise in the legal retirement age to 64 from 62, despite major opposition to the changes.

  • Finding political consensus

Referencing the political deadlock which gripped the French parliament over summer, Barnier encouraged MP’s to work together. “We need to listen, we need to be respectful and we need dialogue,” he said.

He said he would like to see fewer laws suggested with more time to debate them to encourage cross-party support, and cooperation between the National Assembly and the Government.

“We will listen to and respect each and every one of you” he said to MPs assembled in the chamber, “even if this respect is not always reciprocal.”

He also suggested reopening discussions on France’s controversial pension reform law which came into effect in 2023 and voiced support for "a yearly day of citizens consultations" during which members of the public could debate with elected officials in person or online.

  • Delay in New Caledonia local elections

Barnier told parliament on Tuesday that he was delaying local elections in the French overseas territory of New Caledonia until the end of 2025.

The Pacific island of New Caledonia has been hit by violent unrest between indigenous Kanaks and French loyalists.

  • Zero tolerance on racism and anti-Semitism

Barnier vowed to take a 'zero tolerance' approach regarding racism and anti-Semitism, leading the government of a country that has become increasingly divided on its shared values and political views.

"I have my own red lines, which are also those of the whole government - there will be zero tolerance for racism and anti-Semitism," Barnier told parliament.

  •  Minimum wage to be increased by two percent in November

France's minimum wage - known as the 'SMIC' - will be increased by 2% on November 1, Barnier told parliament, two months ahead of the scheduled hike.

  • Stricter migration policies

Barnier pledged to introduce stricter immigration and integration policies to help France meet its “integration objectives”.

"We no longer have satisfactory control over our migration policy," Barnier said. "As a result, we are no longer meeting our integration objectives in a satisfactory manner."

The new prime minister vowed to be "ruthless" with people-traffickers who encourage migrants to illegally cross the Channel and the Mediterranean.

(FRANCE 24 with Reuters, AFP and AP)