The Prime Minister of France, François Bayrou, announced on Tuesday a Chainsaw Plan to implement deep budget cuts aimed at reducing the country's growing fiscal deficit and the increase in debt.
The proposed measures include the freezing of pensions, cuts to social and healthcare spending, the elimination of two national holidays, the reduction of tax benefits for higher-income sectors, and a significant adjustment in the number of public sector employees.
In a highly anticipated speech before lawmakers, ministers, and the media, Bayrou detailed his proposal to cut 43.8 billion euros ($47.2 billion) from public spending, warning that the current level of indebtedness represents a "mortal danger" for the French economy. "This is the last stop before the precipice, before debt crushes us," he warned.
Emmanuel Macron y François Bayrou.
The head of government emphasized that France's public debt is growing at a rate of 5,000 euros ($5,390) per second, and stressed: "It's late, but there's still time." He also described France as a country addicted to public spending and called for urgent structural change.
Bayrou also recalled the case of Greece, which more than a decade ago went through a deep debt crisis, forcing it to request successive international bailouts and to implement severe austerity policies for years to achieve its recovery.
Bayrou indicated that, starting in 2026, neither social benefits nor income tax brackets will be updated in line with inflation. He also proposed eliminating two national holidays. Among those he mentioned as possible to eliminate are Easter Monday and May 8, a date with high symbolic value for commemorating the surrender of Nazi Germany in 1945 and the end of World War II in Europe.
The Prime Minister stressed that excessive indebtedness affects not only households and businesses, but also the State as a whole. He pointed out that resorting to monthly borrowing to cover expenses such as pensions or state salaries is unsustainable and that it is urgent to reverse this dynamic before it becomes uncontrollable.
France closed 2024 with a fiscal deficit equivalent to 5.8% of Gross Domestic Product, which represents 168.6 billion euros ($181.7 billion), a figure well above the limit set by the European Union. In response, Bayrou outlined a fiscal roadmap to progressively reduce this imbalance: to 5.4% this year, to 4.6% in 2026, and finally below the 3% threshold required by Brussels in 2029.
President Emmanuel Macron delegated to Bayrou the responsibility of addressing the restructuring of public finances with the 2026 budget, following his decision to dissolve the National Assembly and call early legislative elections. That election resulted in a fragmented parliament with no majority, making it difficult to implement stricter fiscal policies in the face of increased spending.
Recognized for his firm stance against indebtedness for years, Bayrou did not hide that significant efforts will be necessary. Nevertheless, he anticipated that defense spending will continue to rise during the coming year.
