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France’s new prime minister, François Bayrou, has chosen Eric Lombard, head of the state-backed financial group Caisse des Dépôts, as finance minister, giving him the key role of trying to enact a budget for next year.
Lombard will be tasked with crafting a 2025 tax and spending plan that can be approved by Franceof the strident Parliament without an absolute majority, at the same time that it begins to repair the country’s degraded public finances.
Bayrou’s predecessor, Michel Barnier, was overthrown by the National Assembly in a vote of no confidence earlier this month due to opposition from left-wing and far-right political parties to his deficit-reduction budget.
On Monday, Bayrou set the ambitious goal of trying to get as close as possible to Barnier’s goal of reducing France’s deficit to 5 percent of GDP by the end of 2025, down from more than 6 percent this year.
“I think we need to find something around 5 (percent of GDP), a little more than 5, that will allow us to reach an agreement and achieve a balance,” he told BFM TV.
Bayrou said that “the priority should be to cut unproductive public spending” and added that companies could be asked to pay higher taxes for a “temporary period.”
Members of Bayrou’s cabinet were introduced on Monday after days of disputes between him and President Emmanuel Macronwho officially appoints ministers following the recommendations of the prime minister.
Macron and Bayrou are under pressure to end political turmoil in France by creating a government that can survive and pass crucial measures in a divided parliament.
France is on its fourth prime minister this year, a level of turnover unprecedented in the French Fifth Republic, founded in 1958.
Barnier’s administration only lasted three months, making him the shortest serving prime minister.
Brussels and financial markets have been scrutinizing France to see if it can begin to reduce its deficit, which is well above the EU limit of 3 percent of GDP.
Bayrou, who has led the small MoDem party allied with Macron’s centrist bloc in parliament since 2017, does not have enough votes to pass a budget.
If Bayrou seeks to override lawmakers and invoke a clause in the French constitution to approve the budget, as Barnier did, he will be vulnerable to a vote of no confidence.
Last week Parliament approved a provisional emergency budget to avoid the closure of government services in January.
Lombard, a 66-year-old former banker and technocrat, has led the Caisse des Dépôts since Macron selected him in 2017 to lead the group, which makes investments in public housing, infrastructure and green projects.
In matters of defense and international diplomacy, which are considered the responsibility of the president and not the prime minister, Macron has opted for continuity by keeping the loyal Sébastien Lecornu as Minister of the Armies and Jean-Noël Barrot as Minister of Foreign Affairs. Both served in Barnier’s government.
About half of the ministers in the Barnier administration have been retained in the same positions by Bayrou.
Among them is Bruno Retailleau, a right-winger who made his mark as Interior Minister with tough speeches on immigration and crime.
Former Prime Minister Élisabeth Borne, also from Macron’s centrist camp, will return as Education Minister.
Political turmoil in France began when Macron called early parliamentary elections in June. only to lose and give way to a more fractured National Assembly.
Marine Le Pen’s far-right National Assembly plus a left-wing bloc made up of France Unbreakable, Socialists, Communists and far-left Greens voted to oust Barnier as prime minister.
Le Pen, whose party is the largest in the National Assembly, sealed Barnier’s fate when she rejected concessions in your budget proposal.
To try to avoid being beholden to the National Assembly, Bayrou sought to win over moderate-left lawmakers by offering them concessions and positions in what he said would be a government of national unity.
Although the Socialists, Greens and Communists initially seemed open to such an agreement, they subsequently decided that Bayrou was not offering enough and none joined his government.
“This is not a government but a provocation,” said Socialist Party chief Olivier Faure.
In a sign of how the National Assembly still has influence, Bayrou was forced to abandon the nomination of Xavier Bertrand, a right-wing politician and longtime adversary of Le Pen, as justice minister. He noted that his presence in Bayrou’s government would displease his party.
Instead, Bayrou chose Gérald Darmanin, a Macron ally and former interior minister, as justice minister.
“Failure to reach an agreement with the left puts this government in the same fragile position as the previous one,” said Chloé Morin, political analyst and author.
