French budget crisis: PM Bayrou floats abolishing two national holidays as part of spending cuts

15 Jul 2025, 13:44 · France 24

Bayrou detailed his effort to slash €43.8 billion from France's budget in a highly anticipated speech on Tuesday, warning that excessive debt is a “mortal danger” for the country and that France is now facing a “moment of truth” regarding its financial situation.

"It's the last stop before the cliff, before we are crushed by the debt," Bayrou said in a speech to MPs, cabinet members and journalists.

The prime minister added that debt is increasing by €5,000 every second.

"It's late but there is still time," Bayrou said, adding that France was addicted to public spending and had to change.

He said the French must not forget the experience of Greece, which went through a full-blown debt crisis over a decade ago and needed multiple international bailouts and years of tough austerity policies to get back on its feet.

The cuts involve reducing the number of civil service workers and a "solidarity contribution" for "the wealthiest" as well as the abolition of tax breaks for business expenses for pensioners. Bayrou added that welfare benefits and income tax brackets would not be adjusted for inflation in 2026.

He also proposed scrapping two public holidays, citing for example Easter Monday and May 8.

A national holiday in France and across Europe, May 8 holds historical significance as it commemorates the surrender of Nazi Germany in 1945, marking the end of World War II.

The prime minister stressed that over-indebtedness is a curse not only for families and businesses but for the entire country. He warned that relying on borrowing every month just to pay pensions or civil servants’ salaries is a dead-end, emphasising the urgency of addressing the issue before it spirals out of control.

France’s public deficit reached 5.8 percent of GDP in 2024, totalling €168.6 billion — well above the maximum allowed by European Union rules.

To address this, Bayrou outlined significant budget cuts worth tens of billions of euros, aiming to gradually reduce the deficit to 5.4 percent of GDP this year, 4.6 percent in 2026, and ultimately bring it below the 3 percent EU threshold by 2029.

President Emmanuel Macron has left Bayrou the task of repairing public finances with the 2026 budget after his own move to call a snap legislative election last year delivered a hung parliament too divided to tackle spiralling spending and a surprise tax shortfall.

Long-time debt hawk Bayrou has tried to warn the French that broad sacrifices are unavoidable, although defence spending will be allowed to increase next year.

'The moment of truth': French PM Bayrou lays out budget cuts

To display this content from YouTube, you must enable advertisement tracking and audience measurement.

Accept Manage my choices

One of your browser extensions seems to be blocking the video player from loading. To watch this content, you may need to disable it on this site.

Try again

Bayrou, a veteran centrist, must persuade the opposition ranks in France's fractured parliament to at least tolerate his cuts or risk facing a no-confidence motion like the one that toppled his predecessor in December over the 2025 budget.

Bayrou has so far survived eight no-confidence motions. The far-right National Rally party has indicated it will not back the new budget cuts and has already called for another vote on his government.

Calling for a new hike in defence spending on Sunday, Macron urged lawmakers not to trigger another no-confidence motion, saying that the one in December had hurt companies and set back a defence build-up by delaying the 2025 budget.

"That vote has delayed the defence budget. It is now up to the government to allocate the necessary funds in a timely manner so we can continue to innovate more quickly, to produce more quickly," he said.

Left-wing parties will likely baulk at welfare cuts, while the far right warns a broad spending freeze is unfair to French citizens and could prompt them to oppose Bayrou's plans.

In the final two years of his second term, the dramatic deterioration of public finances may tarnish Macron's legacy.

A political outsider, he was first elected in 2017 on promises to break the right-left divide and modernise the eurozone's second-biggest economy with growth-friendly tax cuts and reforms.

Successive crises – from protests, Covid-19 and runaway inflation – have shown he has failed to change the country's overspending habit, however.

With interest payments potentially becoming the biggest budget outlay, financial markets and ratings agencies are keen to see whether Bayrou can get his plans through parliament without triggering another political collapse.

(FRANCE 24 with Reuters and AFP)