The French government announced a austerity budget plan that includes significant cuts to public expenditure and the abolition of some statutory holidays to reduce the rapidly increasing national liability. Prime Minister François Bayrou emphasized the need for stringent fiscal reforms, stating, "If we do not act now, we could face a financial crisis like Greece."
According to the New York Times (NYT) on the 15th (local time), Prime Minister Bayrou held a press conference to announce the main direction of the 2026 budget and explain the inevitability of austerity policies. He said, "To achieve a defense expenditure level of 5% of gross domestic product (GDP), as recommended by the North Atlantic Treaty Organization (NATO), we must expand the defense budget while saving a total of €43.8 billion (approximately 70 trillion won) in other institutional sectors," and asserted, "All budget items excluding defense must be frozen or reduced."
On this day, Prime Minister Bayrou proposed various austerity measures, including restructuring the public sector. The plan is to reduce labor costs by only filling one-third of retiring civil servants and to streamline inefficient national agencies. Changes in social security expenditure, such as cuts to prescription drug subsidies, and restructuring of healthcare expenditure were also included. He highlighted the need for health insurance reform, stating, "The antibiotic consumption of the French people is double that of Germany."
Prime Minister Bayrou also faced controversy by proposing a reduction in statutory holidays. Currently, France has 11 public holidays annually, and proposals are being considered to exclude Easter Monday and Victory in Europe Day (May 8) from this list. Bayrou stated, "There are too many holidays clustered in May," and added, "If everyone works one more day, productivity and tax revenue will increase."
However, it seems unlikely that the two holidays under discussion for abolition will be implemented due to their significant symbolism. Easter Monday falls on the day after Easter each year and has been utilized as a family holiday in France. May 8, Victory in Europe Day, commemorates the surrender of Nazi Germany in 1945, and the French government holds military ceremonies annually to honor its significance.
There has already been strong backlash from the political sphere. Marine Le Pen, the leader of the far-right National Rally (RN), and Jean-Luc Mélenchon of the left-wing party France Insoumise, strongly opposed the austerity plan and demanded Prime Minister Bayrou's resignation. RN leader Jordan Bardella criticized, "Abolishing historically significant holidays is a direct attack on French labor and identity."
Observations suggest that Prime Minister Bayrou's political position is precarious. He currently leads a minority government that lacks a majority, and his predecessor, Michel Barnier, was dismissed last year due to a no-confidence vote in parliament following efforts to push through budget reforms. Musharraf Rahman, the Europe director of Eurasia Group, analyzed that "Prime Minister Bayrou has effectively adopted an 'all-in' strategy, aware that the likelihood of these measures passing is low," and stated, "It illustrates that France's fiscal situation has reached a critical point."
Meanwhile, this austerity plan is seen as a desperate measure reflecting France's fiscal crisis. Currently, France's national liability reaches 114% of GDP, and the budget deficit for 2024 is projected to be 5.8% of GDP, significantly exceeding the European Union's (EU) recommended threshold of 3%. As a response, the French government has announced plans to reduce the deficit to 4.6% by next year and below 3% by 2029.
In addition, the French government plans to pursue structural reforms alongside austerity measures, including increasing investment in the defense industry, reforming the unemployment benefits system, and promoting labor market flexibility. Prime Minister Bayrou appealed, "If we do not make decisions now, soon the finances could be paralyzed just by debt interest," calling it "the necessary pain for fiscal normalization."