French Prime Minister François Bayrou outlined on Tuesday, July 15, his main proposals to reduce France's public deficit by €43.8 billion in 2026. "Everyone" will "have to contribute to the effort" to get public spending back under control, he said in a press conference, calling for "work and the competitiveness of businesses" to be "protected as much as possible."
His plan is divided into two phases: "a plan to say 'stop the debt'" and a plan "to say 'move forward with production.'" The ultimate goal is to bring the country's public budget deficit down to 4.6% of its GDP in 2026, compared to 5.8% in 2024. Bayrou's announcements come amid a backdrop of international trade and military tensions. On Sunday, President Emmanuel Macron called for an additional €3.5 billion in defense spending in 2026.
"The whole nation must work more (...) so that the activity of the country as a whole increases over the year, and so that France's situation improves. I therefore propose that two public holidays be eliminated," said Bayrou, citing "as examples" the holidays on Easter Monday, which he said "has no religious significance," and May 8, on which victory in World War Two is commemorated. The prime minister said he was "ready to accept or consider others."
Bayrou announced a freeze on the scales used to calculate taxes, welfare benefits and pensions in 2026, saying the measure would curb increases in public spending by €7 billion. "We will have exactly the same amount in pensions for every retiree as in 2025," he explained. "All welfare benefits will, in 2026, be maintained at their 2025 level, with no exceptions," he added. "The income tax and [social security contribution] brackets will also be maintained at their level from this year," said the prime minister.
Bayrou also announced a "freeze" on government spending. "The government sets, as a first rule for itself, not to spend one euro more in 2026 than in 2025, except for increased debt servicing costs and additional spending for the military budget," he said, also putting forward a rule of "not replacing one out of three civil servants who retire (...) for the years to come."
Bayrou also announced the creation of a "solidarity contribution" for France's "most affluent" individuals, insisting that "the nation's effort" to restore the public finances "must be equitable." This contribution "will require the highest incomes to participate in the national effort," he added, while also reiterating his wish to "combat the abusive optimization of unproductive assets."
Bayrou went on to announce that a bill "against social and tax fraud" would be tabled in the fall, aiming to "better detect, sanction, and recover lost funds." He specified that the plan would target "tax and social loopholes that, first and foremost, benefit the most well-off households and large businesses." The prime minister said he wanted to "hunt down useless, ineffective tax breaks." Bayrou also said that "professional expense benefits for retirees are not entirely justified." But "we must not touch small and average pensions," he added.
The government will require local authorities to cut €5.3 billion from their spending in 2026, according to a document the prime minister's office sent to media outlets during the presentation of Bayrou's savings plan on Tuesday. A measure deducting funds from local authorities' tax revenues, amounting to €1 billion in 2025, will be "extended" for the 2026 budget, the prime minister announced.
To achieve €5 billion in cuts to the country's healthcare budget, a similar amount to the one initially provided for in the previous budget plan, Bayrou introduced a measure that will directly affect all patients: medical copayments, meaning the amount that patients pay out-of-pocket for medication, will see their annual cap double to €100 per person, up from €50 until now.
Another announcement concerns people with chronic illnesses, such as the 13 million patients in France who are officially recognized as having a long-term condition. Bayrou adopted several proposals from the national health insurance fund, expressing his wish for more thorough checks on medication reimbursements and for patients to no longer be covered by the system when their health "no longer justifies" the health insurance fund's obligation to reimburse 100% of their medical expenses.
When pressed on the issue of sick leave, the rate of which has increased sharply in recent years, Bayrou did not exactly specify how he plans to stop the trend. Currently, after 30 days of medical leave, an employee cannot return to work without the approval of an occupational doctor, Bayrou noted. He recommended that general practitioners be allowed to authorize employees to go back to work (except in cases of occupational diseases or workplace accidents).
Bayrou announced that, "before the end of the year," he would propose a bill to Parliament that would "create a unified social benefit, for a clearer solidarity and one that always prioritizes work." The idea of a single social benefit, which would merge several different welfare benefits together, is one of Macron's longstanding campaign promises, intended to address the issue of individuals not claiming certain benefits they are eligible for.
Six months after the last law on unemployment insurance was passed, Bayrou announced his intention to reform the system once again and hold negotiations with labor unions and employers' federations on the subject of unemployment benefit payments. He said he aims to "facilitate hiring" and increase the number of jobs on offer. The prime minister also said he wanted to open discussions on the country's labor law, "to improve working conditions for everyone."
Bayrou also presented a "plan" to increase national production. To this end, he announced his intention to toughen penalties for companies that impose excessively long delays in paying their business partners, subjecting them to financial penalties that could range "up to 1% of annual revenue."
He also said he wants to introduce "a tax on small parcels" to "protect our shops and producers from the tidal wave of unfair competition they face."
Bayrou also announced a €900 million investment in innovative new companies, nestled amid his plan's many cost-cutting measures. "We will allocate €900 million in additional equity funding to investment in businesses," he said, adding that venture capital is "a powerful tool for business innovation and growth."
Translation of an original article published in French on lemonde.fr; the publisher may only be liable for the French version.