What role will Finance Minister Lombard play in Bayrou's debt reduction strategy

Introduction

Finance Minister Eric Lombard will play a crucial role in Prime Minister François Bayrou’s debt reduction strategy for France. His responsibilities and approach include

Selection of ministers in Bayrou’s government

Finance and economy — Eric Lombard

Public finances — Amelie de Montchalin

Interior — Bruno Retailleau

Foreign affairs — Jean-Noel Barrot

Justice — Gerald Darmanin

Defence — Sebastien Lecornu

Education — Elisabeth Borne

Agriculture — Annie Genevard

Industry and energy — Marc Ferracci

Budget Formulation

Lombard is tasked with drafting the 2025 budget, which aims to reduce France’s deficit to around 5% of GDP. This challenging task involves:

Balancing deficit reduction with economic growth

Revising the previous administration’s proposal of €60 billion in spending cuts and tax increases

Finalizing the budget by mid-February

Fiscal Strategy

Lombard’s approach to fiscal policy emphasizes:

Reducing the deficit without stifling economic growth

Seeking a balance between austerity measures and stimulating the economy

Addressing France’s high real interest rates, which benefit the wealthy and hinder efforts to tackle inequality and finance climate initiatives

Parliamentary Negotiations

A key part of Lombard’s role will be navigating the fragmented National Assembly to gain support for the budget. This involves

Building consensus among opposition lawmakers from across the political spectrum

Negotiating with various factions to secure approval for the budget

Economic Expertise

Lombard brings significant financial sector experience to his role, which Bayrou hopes will aid in budget negotiations:

Previously served as CEO of the Caisse des Depots Group

Has a background in banking, insurance, and business

Briefly advised a Socialist Finance Minister in the 1990s

Restoring Financial Credibility

Lombard’s appointment aims to address France’s economic challenges and restore confidence:

Tackling the country’s debt, currently estimated at 112% of GDP

Addressing concerns raised by financial markets, ratings agencies, and the European Commission

Working to improve France’s standing in Europe and maintain its economic maneuverability

Conclusion

In summary, Eric Lombard will be at the forefront of Bayrou’s debt reduction strategy, tasked with crafting a budget that balances fiscal responsibility with economic growth while navigating complex political dynamics.

No doubt the new landscape is attractive but we need to see it flourish. If this does not go through parliament in Mid Feb, that would be end of Marcos’s career.