France's Budget Crisis: All Eyes On September 8 And The Risk Of Political Upheaval

(MENAFN- The Rio Times) France's economic story now turns tightly around its public finances and the fate of Prime Minister François Bayrou's government.

Official numbers show the budget deficit at €142 billion in July-one of Europe's widest gaps-driven by years of overspending and rising debt, now over 113% of France's GDP.

Bayrou's government presented the 2026 budget proposal to parliament in mid-July. The plan, which calls for €44 billion in spending cuts, aims to reduce the deficit from 5.8% of GDP toward the EU's 3% limit.

Key proposals include cuts to public hiring, freezing pension adjustments, and removing two public holidays. The measures triggered fierce opposition across the political spectrum.

Recognizing the lack of majority support, Bayrou will present his government's policy statement and ask for a vote of confidence in the National Assembly on September 8, 2025.



All major opposition parties have declared they will vote against him, making government defeat on September 8 highly likely. If Bayrou loses the confidence vote, French political rules require his government to resign.

President Macron would then have to appoint a new prime minister who could gather support in a deadlocked parliament or, in a riskier move, dissolve the Assembly and call new elections.

Either path would increase political and economic uncertainty, block or delay the 2026 budget, and risk further downgrades of France's fiscal reputation.

In the worst-case scenario, France might need to extend the 2025 budget as a stopgap-a move that would further weaken government credibility at home and in Europe.

As France faces these challenges, many economists and political analysts note that the possibility of issuing Eurobonds is now higher than ever.

With Germany also showing signs of budget strain and France's economy too large for a traditional bailout, there is growing pressure across Europe for joint debt solutions.

Eurobonds may become a central topic as leaders seek ways to stabilize markets and reinforce financial solidarity among eurozone members if France's crisis deepens.

French political stability is now deeply linked to fiscal choices. If gridlock continues, the risk of rising borrowing costs and sharper scrutiny from credit agencies and the EU grows.

France's path in the weeks ahead will shape not just its own outlook, but set the tone for fiscal discipline and confidence throughout Europe.

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