Bayrou Flags French ‘Institutional Risks’ in Bid for Government
(Bloomberg) -- French Prime Minister Francois Bayrou has summoned the leaders of the country’s political parties, National Assembly and Senate to a meeting Thursday in a bid to add urgency to his quest to form a new government.
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France is in an “unprecedented and serious situation,” he said in the letter, which was sent to the media. It said the tragedy of cyclone-hit Mayotte has added to the “institutional risks” the country is facing.
Bayrou’s invitation for an additional consultation round before proposing a list of ministers to President Emmanuel Macron comes just hours after the Senate adopted a stopgap budget bill. This is designed to enable the government to keep functioning from January until the country adopts a budget for 2025.
The legislation, which will allow the state to keep levying taxes and borrow money, was needed after Bayrou’s predecessor, Michel Barnier, and his government were ousted in early December. The political turmoil unleashed by far-right leader Marine Le Pen has led to increasing concern about the economy.
The Bank of France this week said that its analysis showed that relying on the emergency legislation would significantly increase the deficit in 2025. However, it said its working hypothesis is that a full budget bill would be approved early next year that could bring the shortfall to somewhere between 5% and 5.5% of economic output next year, compared with an estimated 6.1% in 2024.
French Growth Prospects Slow as Political Uncertainty Weighs
Moody’s Ratings over the weekend cut France’s credit rating, citing its weak finances and political gridlock.
Bayrou, 73, is veteran centrist and has been consulting with a number of French political parties to form a government. While he said he “hoped” to have a list of ministers by the end of the week, his office has said it won’t be hosting far-right and far-left leaders on Thursday.
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