France: New Prime minister, (almost) same majority problem

On December 13, 2024, President Macron appointed François Bayrou as the new Prime Minister of France. Like his predecessor, the leader of the centrist party allied with the presidential coalition is a veteran of French politics. Like Mr. Barnier, Mr. Bayrou will govern with only a relative majority in Parliament, facing a host of similar challenges. He is likely to seek a “non-aggression pact” with other parties to prevent a swift dismissal, but his mission will undoubtedly be difficult. We believe he will find himself in a precarious position, leading a fragile government with a life expectancy of no more than seven months, with the possibility of new snap elections next summer. His immediate priority will be to establish a functioning government and to pass the special finance bill by the end of the year. Following that, he will need to propose a 2025 budget that is sufficiently consensual to avoid being rejected. Given this context, the prospects for fiscal consolidation in France in 2025 appear quite limited.