(Bloomberg) — France’s Prime Minister Francois Bayrou said he would open the contested 2023 pension reform to renegotiation as he seeks the backing of lawmakers to stay in power and urgently adopt a budget.
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The premier said labor and business unions will be tasked with negotiating changes that could include halting the planned increase in the minimum retirement age to 64.
Any potential modifications must not worsen the financial balance of the vast public system, he said.
Should the three-month period set for renegotiating the reform fail, the current plans will apply, Bayrou added.
“The first emergency is to respond to the question of pensions that is dominating public debate,” Bayrou said in his first policy speech at the National Assembly.
Bayrou was appointed last month after his predecessor, Michel Barnier, was toppled when opposition parties from the left and the far-right joined forces in a no-confidence vote over the 2025 budget.
To avoid falling at the same hurdle, the new premier and his minority government have aimed to convince lawmakers in a divided parliament to abstain in repeats of such ballots.
Bayrou also gave more details on how he plans to adopt a 2025 budget to urgently rein in gaping deficits. The previous fiscal plan was rejected with the collapse Barnier’s government when he tried to push €60 billion ($61.2 billion) in tax increases and spending cuts through parliament to bring the deficit down to 5% of economic output from around 6.1% in 2024.
Bayrou set out a less ambitious target of a gap at 5.4% this year, based on “significant savings.” He also reduced the economic growth forecast for the budget to 0.9% from 1.1% as activity is faltering amid the prolonged uncertainty.
“No policy of recovery and refoundation can be conducted if it does not take into account our over-indebtedness and if it does not set itself the objective of containing and reducing it,” he said.
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