Budget, immigration set to dominate French PM Barnier’s much-awaited policy speech

France's Prime Minister Michel Barnier will on Tuesday outline the policy programme of his new government, seeking to shore up its fragile position just three weeks after taking office.

Barnier, a right-wing former EU Brexit negotiator, was appointed by centrist President Emmanuel Macron to bring some stability after the political chaos created by a hung parliament that resulted from snap elections this summer.

While Barnier has cobbled together a right-wing minority government, it is under the constant threat of facing votes of no confidence brought by either the left or the far right.

Read moreA look at key ministers in France's new government line-up

The far-right National Rally (RN) of three-time presidential candidate Marine Le Pen has the most MPs of any single political party in the new National Assembly and commentators have noted that the fate of Barnier's government risks being at its mercy.

The left, whose lawmakers are united in a coalition, is expected to swiftly put forward a no-confidence motion, but with the RN biding its time for now.

The rightward shift in French politics comes as part of a general trend in Europe which also on Sunday saw Austria's far-right Freedom Party come out on top in national elections.

"I have been here for 20 days and I do not know for how much longer," Barnier said on Saturday, acknowledging the fragility of his situation given "the unprecedented situation" in the National Assembly.

"But I am here as someone who is embarking on a long journey ... with a lot of determination," he said.

Tax hikes expected

A key focus of the speech will be improving France's budget position, with Barnier saying he wants to increase certain taxes by targeting "those who can contribute to this effort" and sparing "those who are on the ground, who work, who produce".

Barnier is planning tax measures that would boost state revenues by 15 billion to 18 billion euros, according to French daily Le Parisien.

The new government is under pressure to plug a hole in the finances of the euro zone's second-biggest economy, finding billions of euros in spending cuts and tax increases to finalise a 2025 state budget and hand it over to lawmakers by mid-October.

"Barnier is expected to propose several levers to achieve this objective," Le Parisien reported, without citing sources, saying Barnier's plans include raising an additional 8 billion euros through taxes on corporations, and imposing an additional 3 billion euro levy on energy companies and share buybacks.

The plans also include significantly raising income taxes for top earners which would bring in some 3 billion euros, and increasing electricity taxes for another 3 billion euros, the paper said.

The report also suggested that Barnier intends to postpone France's achievement of the euro zone's common 3% deficit target to 2029 from 2027.

In a sign of the trouble the new government faces, former interior minister Gérald Darmanin issued a stark warning against the move.

"Many of us will not be able to support a government that would increase taxes: that would go against everything positive that we have done for the French people," he said.

All eyes on immigration position

Barnier's stance on immigration will also be closely followed when he stands up from 13:00 GMT, after the rape and murder of a 19-year-old Paris student where a Moroccan man was named as the suspected attacker.

Read moreFrance’s new interior minister vows tougher immigration rules after student murder

The new prime minister has previously called for a moratorium on immigration while his hardline interior minister, Bruno Retailleau, said there should be a referendum on the issue while admitting this was not possible under the constitution.

Retailleau said that over the past 50 years immigration has greatly affected French society, yet the French have not had the "opportunity to express their opinion".

His stances have appalled the left but gladdened the right, with former president Nicolas Sarkozy applauding his start.

"The moment someone wants to do something, they are immediately accused of being between Hitler and (German occupation era premier Pierre) Laval," Sarkozy said.

Barnier will not be seeking a vote of confidence after his speech on Tuesday, his staff told AFP.

(FRANCE 24 with AFP and Reuters)