France’s Barnier Turns Budget Dilemma Over to Little-Known Duo – Reuters

By Leigh Thomas

PARIS – French Prime Minister Michel Barnier has assigned a relatively unknown duo the critical task of addressing a significant budget gap, prioritizing loyalty over political influence in his choices for finance and budget ministers.

After weeks of anticipation, Barnier revealed his ministerial appointments late on Saturday, selecting 33-year-old junior lawmaker Antoine Armand for the esteemed position of economy and finance minister. Additionally, he appointed 39-year-old Laurent Saint Martin, who previously led the government office responsible for promoting foreign investment in France, as budget minister. In a departure from tradition, Saint Martin will report directly to Barnier rather than the finance ministry.

Both Armand and Saint Martin, who are not widely recognized outside political circles in Paris, face immense pressure to tackle France’s widening budget deficit, currently projected to reach 6% of GDP due to insufficient tax revenue and higher-than-anticipated spending.

Despite their lack of political stature, economists believe they are unlikely to jeopardize President Emmanuel Macron’s legacy of tax reductions and business-friendly reforms, provided they can successfully navigate the passage of the 2025 budget.

"This approach ensures policy continuity; they are loyal and will adhere to Emmanuel Macron’s political directives," noted Mathieu Plane, an economist with the OFCE economics think tank.

Armand, a political newcomer, has represented Macron’s party since 2022, while Saint Martin has completed only one term, losing his bid for re-election in 2022. It remains uncertain which of the two will take the lead in guiding the 2025 budget bill through France’s deeply divided parliament, where they anticipate challenges from opposition parties that could unite to propose a vote of no confidence, potentially destabilizing Barnier’s government.

Traditionally, the finance and economy minister drafts and directs budget legislation through parliament, with the budget minister playing a supporting role. In this case, however, it will be Armand’s responsibility to advocate for the government’s budget decisions in Brussels, where European Union partners may not be sympathetic to further requests for extensions to reduce the budget deficit.

Outgoing finance minister Bruno Le Maire, one of France’s most seasoned politicians, emphasized the challenge during the handover on Sunday, stating, "You won’t find any miracle solutions for public finances in my desk drawer, only solid, detailed proposals to cut spending."

Armand will have significant responsibilities representing France at international forums, such as the G7 and G20, alongside notably more experienced policymakers.

As Armand and Saint Martin work diligently to finalize the 2025 budget bill—typically a process that requires several months and is expected to be presented to lawmakers by October 1—they will face the challenge of balancing tax increases and spending cuts without provoking political backlash.

Although the outgoing government has opposed significant rollbacks of broader tax cuts implemented by Macron, it has left behind proposals for increased taxes on energy firms and taxes on substantial corporate share buybacks.

Any attempts to raise broader taxes are likely to encounter resistance from the far-right National Rally and Barnier’s own conservative Republican party, although Barnier indicated that the wealthiest taxpayers would need to contribute more.

Consequently, the bulk of the effort to address the budget shortfall will likely hinge on unpopular spending cuts, estimated to be between 20 billion to 30 billion euros, depending on the government’s chosen timeline for reducing the deficit, as per treasury calculations.

As Armand and Saint Martin consider both tax hikes and spending reductions, Barnier and Macron are expected to closely monitor their actions, according to OFCE’s Plane, ensuring that existing policies remain intact.