PARIS — Newly appointed French Prime Minister Michel Barnier has a burning file on his desk.
One of the first tasks for the former Brexit negotiator is to reassure Brussels that France is slashing its massive debt, before Paris is hit with an EU punishment. He must also quickly come up with a budget for next year.
The new French government is under tight deadlines to send its spending trajectory for the coming years to Brussels by Sept. 20, and it has asked for an extension that could go until Oct. 15. In parallel, it has to submit to the French parliament a budget for next year by Oct. 1.
France is facing a so-called excessive deficit procedure for breaching European Union rules on public spending last year. France’s deficit ― the difference between how much it spends and how much it brings in ― stood at 5.5 percent of GDP in 2023, well above the 3 percent required by EU rules. The perspective looks gloomy this year too, with the risk that the deficit could even get worse.
Under the bloc’s spending rules, Paris could face EU fines if it doesn’t come up with serious plans to cut its massive debt in the next few years.
French President Emmanuel Macron’s camp now hopes that, given his pedigree in Brussels, Barnier could be the right man to help correct course.
“He knows the ins and outs of the European machine,” French MEP Stéphanie Yon-Courtin, coordinator of the Renew group in the European Parliament’s economic and monetary affairs committee, said. “He is a man of negotiation and I find that the new rules are rules of negotiation.”
New EU spending rules, which came back in force after having been put on hold during the coronavirus pandemic, indeed allow for some flexibility, if member countries manage to argue their case. Paris can obtain extra time ― seven years instead of four ― to cut its debt if it shows it is implementing pro-growth reforms or investing in strategic sectors.
And that’s where Michel Barnier could make the difference.
“The Commission will surely be more accommodating to a French government which has a general willingness to play by the European rules, even if its actual capacity to do so will be constrained in a highly polarized and fragmented French political landscape,” Andreas Eisl, a political economists at the Jacques Delors Institute in Paris, said. “Barnier’s appointment as French prime minister is surely reassuring at the European level.”
Budget negotiations with Brussels are led by the finance minister, meaning that a lot will also depend on who will succeed Bruno Le Maire in that position.
Usually in France, the prime minister is not on the front lines of negotiations in Brussels. Ministers represent the government’s interests in EU talks, while the French president brings the country’s voice to Brussels on high-level files.
Backseat driving
But with Barnier in power, things could be different.
Given his EU background — he served as European commissioner and the EU’s chief negotiator for Brexit — Barnier is expected to play a bigger role on EU files compared to his predecessors.
That hope is also shared out of France and Barnier’s political camp.
Bernd Lange, who chairs the European parliament’s trade committee and knows Barnier well after having worked with him when he was negotiating the Brexit deal, believes it would be smart for Macron to leave Barnier more room to maneuver on EU files.
“If I were the president of France, I would rely on him, trust his experience and give him some space for defending the interests of France in the European Union,” said the German socialist MEP, who also lauded Barnier’s skills as negotiator and deal-maker.
Pending homework
Barnier might be well placed to negotiate with Brussels, but his mission to put French public finances back on track starts at home.
France’s next budget is likely to be Barnier’s first political test. The parliamentary vote on the budget will show how well he can work with majority of lawmakers in France’s National Assembly, the lower chamber of the country’s legislature.
Barnier is under pressure to massively cut French public spending that grew to unsustainable levels during the pandemic. The outgoing government has proposed to freeze spending in 2025 at the same level as this year (€492 billion). But to comply with new EU rules, France must make cuts of at least €30 billion next year, according to a note by France’s finance ministry obtained by POLITICO.
During a hand-over ceremony at the Matignon palace, the premier’s official residence, Barnier said the role of a prime minister is “to say the truth, even if this truth is difficult,” including “the truth on the financial debt.”
As a sign that this is a top priority, Barnier appointed as head of cabinet Jérôme Fournel, who has been the top official in charge of the budget at the finance ministry and the head of cabinet of outgoing Finance Minister Le Maire. Fournel was chosen “to address the budget situation and the future European negotiations,” Barnier’s office said.
In the past, Barnier has advocated for spending cuts to bring public finances in order. But that’s easier said than done.
Both the far left and the far right in the French National Assembly have repeatedly opposed spending cuts. And the survival of Barnier’s government depends on the tacit endorsement of Marine Le Pen’s far-right National Rally, which, like the leftist camp, has recently advocated for costly measures that would worsen France’s debt.
Barnier’s fans are confident that he could do the dirty job and resist pressure from pro-spending parties.
France’s Yon-Courtin, who used to be part of Barnier’s Les Républicains before joining Macron’s ranks, made a parallel between Barnier and Mario Monti, the former European commissioner who was named Italian prime minister in 2011 to clean up Italy’s disastrous budget.
But in Brussels not everyone is convinced.
“By nominating Barnier, Macron has made himself beholden to the far right,” which opposes budget cuts, warned an EU diplomat, who was granted anonymity to speak candidly on the political situation of another country. “Europe is worried about that.”
Gregorio Sorgi contributed reporting.
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