UPDATE: New French Prime Minister Sebastien Lecornu has just announced he will abandon plans to cut two public holidays as part of budget measures to address the nation’s deficit. This decision comes in the wake of Fitch Ratings downgrading France’s sovereign credit score to A+ on September 29, 2023, marking the lowest rating in the country’s history.
Lecornu’s announcement intensifies the scrutiny on his leadership just days into his role. He is under pressure to form a cabinet and draft a €44 billion ($A78 billion) budget that must navigate a deeply divided parliament. In an interview with local papers La Provence and Ouest France, he stated, “We are paying for the instability,” highlighting the urgent need for stability in France’s financial landscape.
The downgrade by Fitch adds to the challenges Lecornu faces, as he attempts to implement a budget that has already met resistance. “My mindset is simple: I want neither instability nor stagnation,” he emphasized, indicating his commitment to collaboration. He called for “modern, frank and high-level parliamentary discussions” with rival parties to secure support for his budget proposals.
Since taking office on September 10, 2023, Lecornu has been tasked by President Emmanuel Macron to lead the government after the ousting of veteran centrist François Bayrou in a confidence vote. The previous prime minister’s plans for austerity faced significant backlash, underscoring the fragile political climate.
French debt levels have surged, with borrowing costs now nearing those of Italy, which has the euro zone’s second-highest debt burden. Lecornu warned, “When interest rates rise, they have a direct impact on the state’s finances, but also directly on the lives of households and businesses.” This statement reflects the urgent need for fiscal responsibility to safeguard families’ economic well-being.
As Lecornu navigates this political minefield, the focus remains on how he will achieve a budget that meets fiscal targets while appeasing various political factions. The coming weeks will be critical as he works to solidify support and outline his vision for France’s financial future.
Stay tuned for updates on this developing story as Lecornu strives to stabilize the government and address the pressing economic challenges facing the nation.
