What is Francois Bayrou doing differently than Michel Barnier in France?

Introduction

François Bayrou, France’s new Prime Minister, is taking a somewhat different approach to tackling the country’s budget deficit compared to his predecessor Michel Barnier:

Emphasis on moral obligation

Bayrou has framed reducing France’s debt as not just a financial necessity, but a “moral obligation”. This rhetorical shift aims to build public support for deficit reduction measures.

Focus on protecting businesses

While still targeting deficit reduction, Bayrou has emphasized the importance of protecting companies, stating “The national treasure is companies. They create wealth. They create jobs”. This suggests a more business-friendly approach to budget cuts.

Balancing growth and deficit reduction

Finance Minister Eric Lombard indicated a slight change in approach, stating “We must reduce the deficit without killing growth”. This suggests a more nuanced strategy compared to Barnier’s proposed €60 billion in taxes and spending cuts.

Seeking broader consensus

Bayrou appears to be making more effort to build consensus across the political spectrum, acknowledging the need to address the “glass wall” between the government and the people.

Adjusted timeline

Bayrou has pushed back the target date for reaching the EU’s 3% deficit goal from 2027 to 2029, potentially allowing for a more gradual approach to deficit reduction.

Cabinet composition

Bayrou has formed a new cabinet with experienced politicians and finance professionals, including former prime ministers and a seasoned investment professional as finance minister, which may help in navigating the political challenges.

Conclusion

Despite these differences, Mr. Bayrou continues to encounter significant challenges in securing the passage of a budget through a fragmented parliament, and it remains uncertain whether his approach will prove more effective than Mr. Barnier’s in addressing France’s fiscal issues.

What is evident is a more conciliatory approach towards individuals and businesses, a revised timeline, and a new cabinet with more expertise in finance.

However, the success of this strategy remains to be seen, as there are no indications of any radical or transformative changes aimed at reducing the budget deficit.

Additionally, he plans to implement spending cuts and tax increases, and supports certain tax hikes advocated by his predecessor, although the specifics remain unclear. What about new estimated revenue by export of defence and technology? What about more revenue from tourism?

It is hoped that these details will be finalized by mid-February. Presently, there is a lack of clear data or evidence on how President Macron will achieve success with his new Prime Minister.