French President Emmanuel Macron (5th from left) and Prime Minister Michel Barnier (right) at the cabinet meeting of the new government in the Elysee Palace.
Photo: Christophe Ena/Pool AP/dpa
France’s new Prime Minister Michel Barnier is in a pickle. Despite all the promises of the free-market liberal Emmanuel Macron and the reforms pushed through by the president, the country is sitting on an ever-growing mountain of debt. The costly Summer Olympics in Paris have added a few more shovels to the problem.
Because of the deficit, France is one of the five black sheep in the Eurozone against which Brussels initiated infringement proceedings in July. The second largest economy is hardly threatened with direct consequences from there, but investors in government bonds are all the more likely to face them. The cabinet, which held its first meeting on Monday, is faced with the question of how the next budget should be structured.
Former Brexit negotiator Barnier is now bringing up the issue of higher taxes for the rich and corporations. This is not a left-wing thing, but rather a symbolic one. Economics Minister Antoine Armand has made it clear that large fortunes should only be taxed in very specific areas. The situation is similar with pension reform: at most cosmetic corrections that cost nothing.
The new prime minister is pretending to distance himself from the “president of the rich,” whose poll ratings are approaching Scholz’s level. His government, in effect a reshuffle of the old one, supplemented by Barnier’s traditional right-wingers and by the grace of the far-right Front National, wants to gloss over its agenda of spending cuts for public services, education, health and the environment.
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