It's unusual for a financial bill to put an end to a political venture. Yet, without any fanfare, the 2025 budget bill, disclosed on Thursday, October 10, at the end of an improbable political sequence, has marked the end of Macron's policy more definitively than a political trial could. The stark figures – A €178 billion deficit, €3.2 trillion of public debt, requiring a €60 billion budgetary adjustment, including nearly €30 billion in the form of tax increases that mainly target businesses – signal the end of the supply-side policy that has been the cornerstone of French President Emmanuel Macron's endeavors since 2017. He had relied on this approach to define his uniqueness, and, ultimately, it led to his failure.
By pampering businesses and investors, all while refusing to raise taxes on the wealthiest individuals, Macron's strategy had three goals: To make the country more attractive to investors, put an end to mass unemployment and put France at the forefront of European construction. The reality, however, is that France is now under close scrutiny by credit rating agencies, and is forced to negotiate an extension with Brussels to bring its deficit back in line with European standards. Meanwhile, Macron has been struggling to assert his influence in world affairs.
The latest crisis in France's public finances is a reminder of the country's status as a middle power, one that never stops having to sell off its resources by dint of living beyond its means. The measures that Prime Minister Michel Barnier's government has been forced to resort to today – a little more taxation, a little less growth in public spending – are just the latest in a long litany of previous adjustment plans, implemented by both the right and the left. France's unique challenge lies in its combination of high public spending and high taxes.
Rapid decline
Supply-side policy was the main element of Macron's approach left intact after its many transformations. It began in 2017, with tax cuts and a more flexible labor market. Five years on, it has been reinforced with the pension and unemployment insurance reforms. The goal was to attract foreign capital and stimulate investment, and it achieved partial success in this regard.
It also sought to introduce the idea in France that the social model could be financed through growth rather than taxes, provided the French were willing to work more. However, it failed democratically: Both the pension reform and the unemployment insurance reform were seen as unfair, leading to powerful protest movements and undermining Macron's legitimacy.
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